Mumbai: The markets rallied for the fifth straight trading session on Tuesday led by financial shares, despite a ratings downgrade by Moody’s. Late on Monday ratings agency Moody’s downgraded India’s sovereign rating for the first time in 22 years by a notch to ‘Baa3’, which is the lowest investment grade. The markets, however, chose to ignore the ratings downgrade as investors sought value in beaten down share prices.
The BSE benchmark, the Sensex, scaled a high of 33,867 and ended on a firm note at 33,825 – up 522 points for the day. In the process, the BSE index has gained over 3,000 points in the matter of mere five trading sessions.
Today again, Bajaj Finance was the top gainer among the Sensex 30 stocks, the stock zoomed nearly 9 per cent followed by Kotak Mahindra Bank up 7.5 per cent. IndusInd Bank, HDFC, PowerGrid, Axis Bank and ICICI Bank were the other major gainers – up 3-6 per cent each. On the flip side, Maruti and ITC were the major losers, down 1.7 per cent each. NTPC and Nestle were the other notable losers.
Also Read: Market Outlook: Bias likely to remain bullish as long as Sensex holds 32,850
While today the markets snubbed Moody’s India rating downgrade, it would be interesting to see how the markets react to a fresh rating downgrade by Moody’s on long-term issuer ratings of 8 Indian firms and 3 banks. The 11 companies are Infosys, TCS, ONGC, HPCL, BPCL, IOC, Petronet LNG, NTPC, HDFC Bank, Exim Bank and SBI.
The Sensex has now reached its recent high around 33,887-odd level, which also coincides with the monthly Fibonacci R2 (resistance) at 33,863. The monthly Fibonacci R3 is placed at 34,200. Given the recent steep rise some amount of consolidation seems warranted at higher levels and hence one needs to be cautious.
In case, a correction sets-in the BSE index is expected to find considerable support in the range of 33,175-32,850. As explained yesterday, the bias for this week is likely to remain bullish as long as the Sensex holds above 32,850-odd level.
As per the daily Fibonacci charts, on Wednesday, in case of an up move the BSE Sensex may face resistance around 34,040-34,110-34,170, and in case of a down move, the BSE index may seek support around 33,610-33,540-33,480.
With today’s 1.5 per cent gain at 9,979, the NSE Nifty has ended at its highest point since March 11, 2020. The NSE index is now just a stone’s throw away from the 10,000-mark, above which it traded for 28 long months until March 2020. It seems like the 10,000-mark is likely to be revisited very soon, but some amount of profit-taking at higher levels is quite possible as markets near over-bought territory.
The NSE Nifty traded firmly above the higher-end of the Bollinger Band on the daily charts for the second straight session. The immediate support level has now moved higher to 9,840-odd levels. The short-term bias for the Nifty is likely to remain extremely bullish as long as the Nifty sustains above 9,840. However, persistent failure to hold 9,840-level in trades can trigger profit-taking. Hence, trades are advised to keep a close eye on this level.
Among the other key momentum oscillators, the MACD (Moving Average Convergence Divergence) and the DI (Directional Index) continue to remain in favour the bulls. The ADX (Average Directional Index) is also firming up. The Slow Stochastic is also positive but showing signs of some consolidation. The 14-day RSI (Relative Strength Index) is nearing overbought zone.
Disclaimer: The article is for information purpose only and does not advocate any buy or sell /recommendation.
