Sensex’s rebound attempt fails, ending 570 points off the day’s highs. Midcaps shine

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Indian markets today broke a five-game losing streak, but significantly ended the day’s highs. Gains in Reliance Industries and Metals stocks were offset by a selloff in Financials. The NSE Nifty 50 index ended up 0.22% at 14,707 while the S&P BSE Sensex closed flat at 49,751 after rising 580 points to the day’s high.

After rising sharply in the first two weeks of February, Indian markets have seen strong profit taking in recent sessions. Reliance Industries was the best boost for the Nifty 50, closing 0.8% higher after the conglomerate announced that it planned to divest its petroleum-chemicals business in the September quarter.

Among the main sector indices, the Nifty metal index rose the most, closing at almost 4% in a context of rising copper prices fueled by the hope of a recovery in demand. Lenders Kotak Mahindra Bank and HDFC Bank were the biggest drag on the Nifty 50, down 3.9% and 1.2%, respectively.

Meanwhile, the broader markets outperformed, with mid and small caps advancing 1.1% and 0.8% respectively.

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Here’s what analysts said about today’s market performance:

Sameet Chavan, Chief Analyst – Technical and Derivatives, Angel Broking

“Our market rebounded strongly in the first half of today; because prices were a bit oversold, which was then supported by the global recovery. However, it failed to hold up to higher levels. high, as we saw individual pockets starting to feel the heat again. If we look closely at today’s peak, it precisely coincided with the 20-day EMA and therefore acted like a solid wall. forward, until Nifty does not break above 14900-15000, the short-term momentum is likely to be activated Therefore, traders are continually urged to use intraday recoveries to reduce long positions. immediate resistance zone remains at 14775 – 14850; while 14665 followed by 14635 should be seen as key supports.The way Nifty is formed, we won’t be surprised to see Nifty slipping below these supports anytime soon to test the levels 14570 – 14470. “

Ajit Mishra, Vice President – Research, Religare Broking Ltd

“Today’s break should be seen as a break after five days of decline. Going forward, global signals and the COVID-19 situation in India would dictate the trend. We advise limiting the effect positions of lever and wait for more clarity. “

Shrikant Chouhan, Executive Vice President, Technical Equity Research at Kotak Securities

“Markets registered small gains after falling sharply over the past five sessions. Most of the time this type of formation works as a continuation and on Wednesday if the market breaks the 14630/49600 level the Nifty / Sensex may fall further to the 14530/49300 level support. However, a 50% retracement shown by the Nifty / Sensex after the Union budget was announced could be a reversal for the market. In short, there should be a buy strategy if the Nifty / Sensex drops to the 14530/14500 levels. However, if the Nifty closes below the 14,500 level, it would indicate further weakness. On the upside, the 14850/50350 and 14950/50750 levels would be the main obstacles. While the metals sector has performed well to date, bank stocks have failed to perform due to exceptionally strong long-term bond yields. “

Deepak Jasani, Head of Retail Research, HDFC Securities

“In the United States, attention will be focused on Federal Reserve Chairman Jerome Powell on Tuesday as he delivers his semi-annual testimony on the economy to the Senate Banking Committee. His comments on rates and inflation could determine the market direction for the week. Nifty broke the 5-day losing streak, but the recovery or rebound was weak. This raises doubts about the sustainability of this rebound. However, a positive expected fall ratio gives hope for broader markets.

Vinod Nair, Head of Research at Geojit Financial Services.

“The domestic market recovered during the morning, supported by a strong Asian market, as negative waves from European peers outpaced gains at the end of the day. Anticipation of a strong global recovery, driven by rising international commodity prices, helped the market, but was tempered by high bond yields and cases of the virus. As a result, volatility has increased on the domestic front, but broad markets continue to be drawn to themes like mid and small caps, cyclicals, energy, PSUs, metals and industrials. “

Manish Hathiramani, Proprietary Index Trader and Technical Analyst, Deen Dayal Investments

“The Nifty gave up most of its gains as the day wore on. The weakness continues to persist in the near term and we can expect the index to slide further to levels closer to 14,500. rally can be used to sell this market down.The upside is capped at 15000 -15100 and until we get over that comfortably markets will remain bearish.

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