Sensex ends in green, Nifty support seen at 17450, may hit 17800 again; Is Nifty on track for a new high?

Posted on by

BSE Sensex and NSE Nifty 50 ended in a positive territory amid volatile trade on Monday, as investors awaited US Federal Reserve’ policy outcome due later this week. BSE Sensex ended 300 points or 0.5 per cent up at 59,141, while NSE Nifty 50 index at 17,622, up 91 points or 0.5 per cent. Index heavyweights such as Housing Development Finance Corporation (HDFC), Bajaj Finance, Hindustan Unilever (HUL), HDFC Bank, Infosys, and State Bank of India (SBI) among others contributed the most to the indices gain. Broader markets underperformed equity frontliners. S&P BSE Midcap index fell 0.2 per cent or 0.4 per cent to settle at 25518, while S&P BSE Smallcap index ended at 29150, down 50 points or 0.2 per cent. India VIX, the volatility index, rose 0.6 per cent to settle at 19.94 levels.

Also read: Harsha Engineers IPO share allotment: Check grey market premium, status via BSE, registrar; listing on 26 Sep

While the undertone of the market remained volatile, a strong relief rally after the recent slump helped benchmark indices to rebound. While European markets and most of the Asian pack continued their downward spiral, the underperformance of the Indian markets last week prompted investors to buy the beaten-down stocks. Despite the recovery, markets may gyrate sharply intra-day amid global uncertainty. Technically, after an early morning fall, the Nifty found support near 17450 (which is double bottom support level) and bounced back sharply and hovered between 17580-17665 levels. If the index trades above 17550 then the pull back formation is likely to continue. Above which, the index could touch the 20 day SMA level at 17675. On further upside, the index may rally up to 17800. On the flip side, below 17550 the index could retest 17450- 17400 levels.

Also read: FOMC meeting this week: Jumbo rate hike of 75-100 bps on cards as US Fed focused on taming red hot inflation

Vinod Nair, Head of Research, Geojit Financial Services

The global market was expected to battle volatility as we approach the Fed policy announcement, while the latest inflation data remained above the estimates. The policy tone indicates hawkish measures, suggesting elevated hikes, leading to the pull-out of FIIs money from the Indian equities. However, this trend is expected to be short-lived, as future inflation trend forecast a clampdown, bringing stability in policy stance by the end of this year.

Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities

Markets witnessed a smart recovery as Nifty gained traction amid a cautious tone. The recovery was seen even as investors reassess aggressive Fed tightening bets amid looming recession risks. Traders now look forward to the important FOMC monetary policy meeting on September 20-21. Technically speaking, the biggest support to watch out will be at 17429 and below the same, Nifty could simply drift lower to 17161 mark. Nifty’s hurdles are placed at 17867 and then at 18115 mark.