The start of next week could see strong momentum again, given how stocks in the US have rebounded. This week, we saw strong buying support in the HDFC twins, which helped propel the markets higher.
On Friday, domestic stocks extended gains for the second straight day, mirroring their global peers. Nifty opened a gap and traded in positive territory throughout the session. The indices closed with nice gains of 182 points (+1.1%) at 16,352 levels. The broader market also ended in the green with gains of 1.4%. All sector indices except Oil & Gas and Metals finished in the green. IT and media were the main gainers with more than 2% each. India’s VIX cooled further by 5.4% to 21.5 levels.
“Global markets were positive after a string of weekly losses as investors took comfort from minutes from the US Federal Reserve suggesting it would continue with a 50 basis point hike in line with market expectations. helped to elevate feelings.
After witnessing multiple hurdles and wild swings over the week, markets have shown some respite over the past two days. The positive momentum continued on Friday thanks to support-based buying in heavy sectors like banking, IT, autos and healthcare. Overall, Nifty had a good recovery from a low of 15,800 levels. However, it needs to break past previous hurdles at around 16,400 zones, above which we can see a new rally in the markets. Investors will take inspiration from monthly macro data to be released next week globally and domestically,” said Siddhartha Khemka, Head of Retail Research, Motilal Oswal Financial Services Ltd.
Overall, we think markets are pricing in rate hikes and therefore if inflation at some stage starts to decline and bond yields start to fall, we could see equity markets around the world , including India, recover.
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Article first published: Sunday, May 29, 2022, 1:25 p.m. [IST]