The stock market opened on a robust note Thursday, buoyed by the NDA's unanimous backing of PM Narendra Modi for a third term. The Sensex jumped 696.46 points to 75,078.70, while the Nifty climbed 179.15 points to 22,799.50. Among Nifty companies, 29 advanced while 21 declined. Leading the gainers were NTPC, SBI, ONGC, Coal India, and Power Grid. Conversely, the top losers included Britannia, Hindustan Unilever, Cipla, Hindalco, and Nestle India.
Technical analysis and market insights
Shrikant Chouhan, Head of Equity Research at Kotak Securities, analyzed the market's technical performance, noting the initial sell-off followed by a sharp rebound. "Technically, after a sell-off early in the day, Nifty and Sensex found support near 21,700/21,800 levels and rebounded sharply, which is a positive sign. The market rallied 880/2600 points from the day's lowest point. Moreover, it also reclaimed the levels of 22,500/74,000 or the 50-day SMA (Simple Moving Average), which is also positive," he explained.
Chouhan elaborated on the market's state, describing it as undergoing an extended pullback following Tuesday's steep decline. "This pullback could extend up to 22,800 to 22,950 levels. Our broader strategy recommendation is to reduce long positions between these levels. If the Nifty stays above 23,000, we could see some short covering in the market. On the downside, support levels exist at 22,400 and 22,300. A close below 22,300 would likely extend the consolidation range, possibly up to 22,000 or 21,800."
Bank-Nifty index outlook
Discussing the Bank-Nifty index, Chouhan remarked, "For the Bank-Nifty, it is also in an extended pullback mode, which could push the index to 49,500 or 49,800 levels. There is support at 48,500 levels, and a close below that may push the index to 48,000 again."
Investor confidence and future projections
The market's strong opening reflects investor confidence following the BJP's electoral victory. Technical indicators suggest potential for further gains while highlighting key support and resistance levels for traders to monitor. Overall, the positive momentum underscores the market's favorable response to political stability, setting the stage for continued growth.
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