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Home / Markets / Stock Markets /  Experts expect Nifty to hit new highs in coming sessions. Here are key levels to watch

Global cues and covid updates will largely dictate the trend in domestic equity market this week, say analysts. And new highs for Indian markets could be on the cards in coming session. Even though earnings season is largely over and some companies like Grasim Industries, BPCL, Sun Pharmaceutical Industries and Eicher Motors are among the few major companies scheduled to announce their quarterly earnings this week. On Friday, enthused by a declining trend in COVID-19 cases in India, the Sensex rose nearly 1000 points to 50,540.80 and Nifty surged 1.8% to 15,175.30, extending weekly gains to over 3%.

The Indian rupee too closed at a near two-month high surged by 29 paise to hit an eight-week high of 72.83 against the US dollar on Friday, tracking positive domestic equities and upbeat Asian peers against the American currency.

However, equity markets may also witness volatility this week amid derivatives expiry on Thursday.

"Markets finally ended a 2-month long consolidation phase and gained over 3% last week. Signs of COVID cases peaking out combined with favourable global cues lifted sentiment. Besides, the earnings announcements also came in line with the expectations and supported the up move. Eventually, Nifty decisively surpassed the hurdle at 15,000 and settled around the week’s high. The broader markets too witnessed healthy buying interest as both midcap and smallcap ended higher by 3.8% and 4.3% respectively," says Ajit Mishra, VP Research. Religare Broking.

"We expect volatility to remain high next week due to the scheduled derivatives expiry of May month contracts. Besides, participants will be closely eyeing the COVID-related updates as the reduction in the cases has raised hopes of gradual unlocking by the states. We feel our markets can outperform the global peers in near future, tracking the favourable developments on the local front. On the benchmark front, Nifty might take a breather around 15,300 followed by the hurdle at the record high. Almost all the sectoral indices are participating in the move but the focus would remain on banking and financial to maintain the prevailing momentum. We advise aligning trades in line with the trend and avoid contrarian positions."

The daily rise in coronavirus cases in India today remained below the 3 lakh-mark for the seventh consecutive day, with 2.4 lakh new cases recorded in a single day, the Union Health Ministry said.

"The entry of new vaccines in the market which will ease supply crunch and a steady decline in the new COVID cases are factors boosting investor confidence in the market. Hence, the market will continue to focus on COVID numbers to pump in more optimism... due to a relatively quiet week for economic data," said Vinod Nair, Head of Research at Geojit Financial Services.

On Friday, the Nifty Bank Index jumped nearly 4%, after SBI, the country's largest lender by assets, reported a record quarterly profit.

Sameet Chavan, chief analyst-technical and derivatives at Angel Broking, said: Looking at the broad based participation on Friday, especially the way banking space is poised; we will not be surprised to head towards record high in the first half of the forthcoming week. In fact, if all the other factors support, we may see new highs also in the coming sessions. However, having said we should not become too complacent and should keep a close track of how global markets behave over the next few days. Any aberration on this aspect may again the dent the possibility of a short term rally. It’s better to take one step as a time and continue with a stock specific approach by following proper risk management."

"Now, the way things are placed, retesting of the record high of 15431.75 looks eminent. Before this, 15220 – 15340 are the levels to watch out for. On the flipside, it is important to note that the immediate base has shifted higher towards 15000 – 14900, which is an encouraging sign," he added.

Nirali Shah, Head of Equity Research, Samco Securities, says Nifty50 index closed the week on a positive note and crossed the previous short term resistance of 15050. "Although it is trading very close to its all-time highs but it is still below the rising channel and has not given any directional move to break it yet. Nifty needs to close decisively above 15200 to start a fresh bullish upmove within the channel. As long as it does not take a decisive direction, we maintain a sideways to mild bullish outlook."

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