The fall in crude oil prices is a major tailwind for Indian stock markets, while FII sales have also fallen significantly. Global markets have also absorbed the expected 25 basis point rate hike by the US Fed.
Bulls dominated Dalal Street amid positive global signals, causing crude oil prices to cool. While the BSE Sensex rose 1,047 points or 2 percent to 56,861, the Nifty 50 index rose to 16,987 minutes before closing. Benchmark indices also gained on positive signals from other Asian markets. “India’s economy is well positioned to absorb any incoming external shock in terms of capital outflows caused by an unpredictable geopolitical environment, according to the Ministry of Finance’s Monthly Economic Review report, but inflation remains a concern,” said Likhita Chepa, Senior Research Analyst, Capital through Global Research.
What pulled the markets higher?
“The rally can be attributed to an overnight rally in the US market and a sharp drop in the price of crude oil. It seems the market is quickly discounting the end of tensions between Russia and Ukraine, which is why we are seeing a sharp reversal in commodity prices, while an increase in covid cases and a lockdown in China are also putting pressure on crude oil prices . The fall in crude oil prices is a major tailwind for Indian stock markets, while FII sales have also fallen significantly. Global markets have also absorbed the expected 25 basis point rate hike by the US Fed. However, some volatility is expected after the outcome of tonight’s FOMC meeting today,” said Santosh Meena, head of research at Swastika Investmart Ltd.
Neeraj Chadawar, Head of Quantitative Equity Research, Axis Securities said: “The Indian market recovered from losses following positive signals from Wall Street. Sentiment was further bolstered by the cooling of oil prices and progress in the Russia-Ukraine peace talks. Now the market awaits the outcome of the FED meeting, as current geopolitical developments further increase inflationary pressures in the global market, and it is important to see the view of central banks. focus on managing inflation effects rather than growth effects.”
Nifty can rise to 17,300 if 17,000 violated
Santosh Meena, Head of Research, Swastika Investmart Ltd. “Technically, Nifty is trading at the near critical level of 16980 which is his 200-DMA and 17000 is also a psychological hurdle, so we’re seeing some pause around this level, but if Nifty manages to get rid of the 17000 mark decisively, then we can expect a rally towards level 17300. On the other hand, 16700 is an immediate support level while 16500-16400 is a sacred demand zone.
“Volatility will remain on the higher side before establishing concrete market direction. It will likely drop below the long-term average once we enter a rate hike cycle, and the trajectory for the actual number of rate hikes expected for 2022 will be known to the market. The second half of 2022 is likely to be more stable compared to the first half,” said Neeraj Chadawar, Head – Quantitative Equity Research, Axis Securities.
This post Sensex up 2% as crude oil prices cool, Nifty could hit 17300 if exceeded 17000 but watch for volatility was original published at “https://www.financialexpress.com/market/sensex-soars-2-as-crude-prices-cool-off-nifty-may-hit-17300-if-17000-breached-but-watch-volatility/2462909/”