Weekly Note : Markets Recovered Over 4% Amid Positive Cues by Mr. Ajit Mishra, SVP - Research, Religare Broking Ltd
Quote on Weekly Note March 22 by Mr. Ajit Mishra – SVP, Research, Religare Broking Ltd
Markets Recovered Over 4% Amid Positive Cues
Markets witnessed a strong rebound last week, with benchmark indices Nifty and Sensex surging over 4%. The rally was fueled by improving investor sentiment, improvement in foreign flows, and positive global developments. Nifty closed at 23,350.4, while Sensex ended the week at 76,905.51, both near their weekly highs.
Key Market Drivers
Several factors contributed to the sharp recovery. Easing pressure from foreign institutional investors (FIIs), marked by positive flows in both cash and derivatives segments, provided much-needed stability. Additionally, crude oil prices and the dollar index remained at lower levels after a recent decline, supporting market sentiment.
Further, dovish signals from the US Federal Reserve regarding future rate cuts, coupled with reports of de-escalation in the Russia-Ukraine conflict, added to the optimism. The rally was broad-based, with all key sectors participating. Realty, energy, and pharma emerged as the top gainers, while midcap and smallcap indices surged between 7.7% and 8.6%, adding to the overall market buoyancy.
Key Events to Watch
With no major domestic economic events scheduled, focus will remain on the expiry of March derivatives contracts and FII activity. On the global front, the US markets will be closely watched, with tariff-related updates and GDP growth data expected to influence investor sentiment. Although US markets saw a temporary respite after a sharp decline, mixed signals suggest potential volatility in the coming sessions.
Technical Outlook
Nifty’s recent breakout from the 22,250-22,650 range has propelled it to a crucial resistance level around 23,400, where key moving averages (100-DEMA and 200-DEMA) are positioned. A decisive move beyond this level could set the stage for further gains towards the 23,800-24,100 zone. On the downside, the 22,750-23,000 range is expected to provide strong support in case of a pullback.
The banking and financial sectors have played a pivotal role in the rally, with the banking index reclaiming major moving averages. A breakout above 50,800 in the banking index could drive further gains toward the 51,700-52,800 range, while 49,900 remains a crucial support level.
Strategy: Buy on Dips
Traders are advised to adopt a “buy on dips” strategy, focusing on sectors that have demonstrated consistent strength. Banking, financials, metals, and energy stocks remain preferred picks, while selective opportunities can also be explored in PSU and auto stocks. Given the sharp rebound in broader markets, midcap and smallcap stocks may offer potential trading opportunities, though aggressive positioning should be avoided.
Overall, market sentiment remains positive, but investors should remain cautious and closely monitor key technical levels and global cues for further direction.
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