Indian stock markets were down from their highs in afternoon trading today, but remained firmly in the green. The Sensex was up 1.2% at 55,308 at 56,242 in early trade. Analysts have warned of intraday volatility as today is also the expiry day of the weekly derivatives contract. Apart from positive global cues, Indian equities also rose as trends showed the Bharatiya Janata Party (BJP) leading comfortably. Uttar Pradesh State Election, The BJP was also ahead in three more states, while the Congress was facing defeat in Punjab.
But analysts say the impact of state election results on Indian markets is likely to be short-lived as news flows in. Ukraine crisis Emotion is likely to dominate.
Asian stocks rose today after a strong rally on Wall Street and a breathtaking jump in Europe, fueled by plunging oil prices and bargain-buying following the Ukraine-fuelled route. The foreign ministers of Russia and Ukraine are due to meet in Turkey, the most senior official to have spoken personally since the war broke out.
“The outcome of the election results may have some impact on the market for only 1-2 days. Partha Nyati, founder of Tradingo, said that the UP elections are considered important from the market point of view.
Santosh Meena, Head of Research, Swastik Investmart said that the Indian market witnessed a strong correction today after some positive news inflow on Russia-Ukraine standoff and a sharp fall due to cooling in commodity prices.
“The trend of state election results is also acting as a tailwind for the Indian equity market. However, it has an effect of only one day and the main focus of the market will be on Russia-Ukraine issue as there are still uncertainties. US inflation data announced today is likely to hit a five-decade high and will act as a key factor in the upcoming US Fed meeting. The market is likely to remain volatile until the Fed meeting.
Key Nifty Levels to Watch Now
Technically, he said, Nifty saw a smart pullback from 15700 levels, but 16800-17000 is an important supply zone that Nifty has to clear for any trend reversal. “Otherwise there is a risk of selling after this pullback. On the downside, 16500-16400 is an immediate support area while 16000/15500 is the next important support level. If Nifty manages to break out of the 17000 level then the bulls will be back in the game where 17300/17500 are the next resistance levels,” Mr. Meena said.
He added that short-term traders should watch the market behavior in the 16800-17000 zone and then trade accordingly, while long-term investors should continue to hoard good quality stocks.
“Our top favorite sectors are capital goods, infrastructure, real estate and financials. But rising commodity prices pose a major challenge in the near future. IT stocks may continue to do well even after the recent correction while some private banks like HDFC Bank, Kotak Bank and ICICI Bank look attractive after the recent fall.
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