Rally to continue but 9,400 prove stiff resistance for Nifty!

Nifty rallied sharply in the first half of the trading session on Monday however, in the second half of the trading session, Nifty lost its momentum and came off the days’ high but still managed to close with handsome gains. And, if we go by the early indication from SGX Nifty, there is a possibility that Nifty may continue its rally on Tuesday too. The reason for early optimism could be the hopes of partial lifting of the lockdown for green zones in the country as well as strong close overnight on Wall Street as New York Governor Andrew Cuomo announced plans for phases reopening of his state’s economy.

The most important thing for the market participants to watch out is whether Nifty be able to cross the level of 9,400 as it had made several attempts to cross this level but failed to pierce it. We believe that only above 9,400 mark, a fresh optimism on Dalal Street will be seen. Till then, oscillation in a range is possible. SGX Nifty is up by 70 points at 9,336 level. On the earnings front, Axis Bank is set to announce its March quarterly results today.

Majority of Asian indices were trading in red on Tuesday despite strong leads overnight from Wall Street. Hong Kong’s Hang Seng is trading in green with gains of 0.07 per cent while, China’s Shanghai Composite is worst hit as it has shed 1.52 per cent and Japan’s Nikkei 225 has slipped 0.61 per cent as the data showed that Japan’s unemployment rate rose to a one-year high in March.

Back home, Monday turned out to be a marvellous session for the bulls. Sentiments on Dalal Street turned positive, following RBI’s liquidity support to the stressed mutual funds. At the end, Nifty surged 1.40 per cent and BSE Sensex rose 1.33 per cent. The rally was broad-based as both Nifty Mid-cap and Small-cap added 1.56 and 0.82 per cent, respectively. All the sectoral indices closed higher. Meanwhile, Nifty Private Bank, Nifty Bank and Nifty IT were the top gainers.

In overnight development, US markets were buoyant as several US states prepared to reopen their economies. With the surge on Monday, the tech-heavy Nasdaq and S&P 500 reached their best closing levels in over a month. At the closing bell, Dow closed at 24,134 up by 359 points, S&P Index jumped 42 points to finish at 2,878 and Nasdaq increased 96 points to 8,730. Markets in European region ended higher, following ease of lockdown restrictions and on hopes that European Central Bank is likely to announce additional stimulus to revive the economies.