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  Business   Market  18 May 2019  Market shows tremendous strength

Market shows tremendous strength

THE ASIAN AGE. | ASHWIN J PUNNEN
Published : May 18, 2019, 2:51 am IST
Updated : May 18, 2019, 2:54 am IST

The market will react to exit polls in early trade on Monday and that could set the tone for the rest of the day as well.

The Sensex surged 537 points or 1.44 per cent to closed at 37,931 while the Nifty ended at 11,407, up 150 points or 1.33 per cent.
 The Sensex surged 537 points or 1.44 per cent to closed at 37,931 while the Nifty ended at 11,407, up 150 points or 1.33 per cent.

The domestic market extended gains for a second session on Friday with the Sensex and Nifty rising ahead of exit poll results on Sunday.

The Sensex surged 537 points or 1.44 per cent to closed at 37,931 while the Nifty ended at 11,407, up 150 points or 1.33 per cent.

Strong buying was seen in private bank, financial, auto and realty stocks, but IT, pharmaceutical and metal stocks witnessed selling.

Despite volatility, the domestic market ended this week on a positive note led by short covering and strong inflows from DIIs.

Weak results from Auto sector and NPA issues in PSU banks led to weakness in auto & PSU indices. But the market reversed from the oversold level, supported by few green shoots in earnings, rise in beaten down blue chips and mutual funds buying.

Technical View

"Nifty on the daily chart has formed a piercing pattern as bulls return despite clouds of volatility. A week that was turning out to muted saw a sharp recovery in indices and Nifty on last trading session to soar and close above 20 Days MA at 11,407, said Mustafa Nadeem, CEO, Epic Research.

According to analysts, in the coming week, there is an event that is able to produce long term trends in the market and is the factor that sets the tone for wealth creation. The political event like election results usually produce the trends that last for years. Hence it becomes very important for the economy.

Market View

"The markets shows tremendous strength and gained nearly one and half percent amid mixed cues. Participants took note of Finance Commission's report which states that India's GDP shows sign of continuous growth despite the volatile global trend. Besides, encouraging earnings announcements further boosted the sentiment. Mixed trend was witnessed on sectoral front wherein media, FMCG, auto and bank posted decent gains while IT, pharma and metal ended lower," said Jayant Manglik, President - Retail Distribution, Religare Broking.

The market will react to exit polls in early trade on Monday and that could set the tone for the rest of the day as well. Besides, the prevailing negotiations between the US and China would also be on the traders' radar. In short, we expect volatility to inch higher. Traders should prefer hedged trades and avoid overtrading.

"Indian markets have shown tremendous strength one day before the long-awaited exit polls, despite the ongoing ambiguity in US-China trade talks. With the last phase of elections scheduled for Sunday, the all-round buying across the sectors reflects market's anticipation that exit polls may indicate the formation of a stable government," said Jagannadham Thunuguntla, Sr. VP and Head of Research (Wealth), Centrum Broking.

"Despite the global volatility, the domestic market extended the surge due to continued accumulation in blue chips by domestic investors and short covering ahead of exit poll on Sunday “, said Vinod Nair, Head of Research, Geojit Financial.

Tags: sensex, auto sector, psu banks