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Below the Quote on Weekly Market Analysis by Mr. Ajit Mishra – SVP, Research, Religare Broking Ltd

Markets rebounded after two weeks of profit-taking and gained over a percent. The week kicked off on an upbeat note, buoyed by positive cues from the global markets. However, volatility ensued as the week progressed, with the markets grappling with uncertainties surrounding mixed earnings. A sharp surge on Thursday further eased concerns but profit taking in the final session capped the momentum. Eventually, both the benchmark indices, Nifty and Sensex, settled at 22,419.90 and 73,730.10 levels respectively. All the key sectors participated in the recovery wherein realty, metal and pharma posted strong gains. Interestingly, the broader indices stole all the limelight as both gained ~4% each.

The coming week is a holiday-shortened one and we expect volatility to remain high citing mixed indications from the global front, especially the US markets. Though the US benchmark index, the Dow Jones Industrial Average (DJIA) has rebounded of late, we need sustainability above 38,700 levels to reclaim strength else profit taking will resume. Besides, earnings announcements would further add to the choppiness across sectors.

The markets have been gradually climbing, reflecting a cautious optimism amid mixed signals. Nifty has surpassed the short-term moving average i.e. 20 DEMA, indicating a strengthening trend and we anticipate robust support in the 22,000-22,300 range, in case of any downward movement. However, the upper boundary of Nifty's upward channel, approximately 22,750-22,900, could limit further gains. We advocate a prudent strategy of buying on market declines, with a focus on performing sectors/themes viz. metal, auto, defense, power, and select banking for potential opportunities.

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