Market Snapshot
Despite weakness in other Asian markets, the Sensex opened with a positive gap of 49 points at 13,163 on the back of Infosys numbers. Late in the day more good news came in from the inflation front which dropped below the 6%-mark to 5.74%. Stocks from auto, banking and metal sector joined the party which led the index rally to a high of 13,421. BSE Sensex closed at 13,389 (up 275 points) while the NSE Nifty closed at 3,916 (up 86 points).
The NSE and BSE cash volumes were higher compared to the previous day at INR 97 bn and INR 47 bn respectively. The F&O volumes were also higher at INR 334 bn.
Sentiment Indicators
The Implied Volatility (IV) across Nifty strikes has increased to 25-27% levels. The WPCR of Nifty Options has increased to 1.20 while the 5 day average is 1.07.
Outlook
The market seems to have formed a direction post the Infosys results which were broadly in line with expectations. The broad based rally on Friday has ensured that the market has broken out of the range. All these factors, coupled with positive cues from global indices will ensure a positive opening for the market today.
We can expect sectors such as banking to outperform on the back of interest shown in the previous few trading sessions. The IT sector will also see some strength due to Infosys results which will form a benchmark. Metals and telecom should also outperform today.
The nifty broke and closed above the crucial 3901 level which was last support for the bears. The immediate outlook for the Nifty has turned bullish and the next resistance is at 3950 followed by 3986, while the immediate support is at 3901 followed by 3847. The bullishness is strengthened by a fresh round of buying visible in IT & Auto stocks.
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