Markets to remain choppy near-term

Markets bounced back on Thursday after the recent fall on the back of positive global cues. The Nifty Index ended 84 points or 0.73 per cent higher at 11582, while the Sensex rose 266 point to close at 38823.

The broad market indices like the BSE Mid-Cap and Small-Cap underperformed the Sensex and Nifty. The market breadth was positive on the BSE/NSE. Sectorally, the top gainers were the BSE Auto, Metal, Telecom and Realty indices. The top losers were the BSE Capital Goods and Consumer Durables indices.

US Federal Reserve Chair Jerome Powell's dovish comments on Wednesday cemented hopes of an interest rate cut this month in the US and soft interest rate policies across the globe, analysts said.

This boosted global stocks, pulled down bond yields and weakened the dollar. Fears of FPI selling due to the adverse provisions in the Union Budget abated for the time being.

Technical View
"Technically, while the Nifty has bounced back smartly, the underlying short term trend remains down. Further downsides are likely once the immediate support of 11537 is broken. Any pullback rallies could find resistance in the 11599 - 11638 band, said Deepak Jasani, Head Retail Research, HDFC Securities.

"We need to understand that the recent downtrend is yet to reverse and hence, traders are advised not to take aggressive positions in anticipation of this. Since, we had a good broad based rally today; traders are advised to keep focusing on individual stocks. Clearly, the entire 'Auto' pack was on a roll after a long underperformance, said Sameet Chavan Chief Analyst-Technical and Derivatives, Angel Broking.

Market View
"We expect the markets to remain choppy in the near term in the backdrop of weak domestic cues. Given the economic slowdown we expect the earnings season to be tepid which will lead to stock specific volatility. Further, CPI inflation and IIP data (scheduled tomorrow) will provide direction to the markets. On the global front, on-going geo-political issues between US and Iran as well as crude oil prices and currency movement will keep the market participants on edge, said Ajit Mishra Vice President, Research, Religare Broking Ltd.