Momentum still intact, Nifty on track to hit 11,700

What was expected to be like to be a day of consolidation turned out to be a day of buy-on-dips as the S&P BSE Sensex rallied over 250 points on March 19 while Nifty50 closed above March 18 intraday high of 11,530.

The final tally on D-Street: The S&P BSE Sensex rallied 268 points to 38,363 while the Nifty50 gained 70 points to close at 11,532.

Rallying for the seventh consecutive day in a row, benchmark indices hit a 6-month high. The Bank Nifty touched a record closing high, led by gains in PNB, Bank of Baroda, Federal Bank, SBI, and Axis Bank.

FMCG, telecom and energy indices rose over 1 percent each while capital goods, auto, and metal indices saw a bit of profit-taking.

The S&P BSE Mid-cap index rose 0.52 percent and the S&P BSE Small-cap index ended 0.37 percent higher.

On the technical charts, Nifty continues to trade above its 5-day exponential moving average (EMA) and nullified the negative implication of Long Legged Doji kind of pattern formed on March 18, which suggests the momentum remains intact.

Strong liquidity is something which is fuelling a rally in Indian markets suggest experts, and the index is on track to hit 11,700, possibly new highs by March-end.

“The trend is clearly heading north and given that we crossed 11,500 on the upside, it could lead to some bit of short coverings that can take the index towards 10,700,” Ashish Chaturmohta, Head of Technical and Derivatives at Sanctum Wealth Management told Moneycontrol.

“In terms of talking about specific stocks in the mid-cap space, we like Bharat Electronics, Can Fin Homes, DCB Bank where we are seeing a strong breakout on weekly as well as monthly charts,” he said.

He further added that Nifty stocks that are in momentum are likely to keep buzzing such as ICICI Bank, Axis Bank and IndusInd Bank as they still have room for another 5 percent upside. ITC has the potential to give 7-8 percent return from current levels, Chaturmohta said.

Stocks in news:

Shares of MindTree fell nearly 2 percent after L&T said on March 18 it would buy 20.32 percent stake at Rs 980 per share in MindTree for Rs 3,269 crore from early investor V G Siddhartha. L&T fell 1.5 percent on Nifty.

The share price of Jet Airways slipped 3 percent after Etihad Airways, who is the major holder in the company informed that it may not invest further in the company.

Shares of Reliance Communications rose 10 percent to hit the upper circuit after the Anil Ambani-led company said it paid Rs 550 crore to Swedish company Ericsson.

Hotel Leela Venture ended 5 percent higher after the company decided to sell its hospitality and hotel operations business on a slump sale basis to Brookfield.

Global Updates:

European markets are trading higher ahead of the outcome of Federal Reserve’s monetary policy meeting which set to kick off later on March 19.

Meanwhile, Asian markets ended mixed on March 19 with Shanghai Composite slipping 0.18 percent to 3,090.98, while Hang Seng index rose 0.19 percent at 29,466.28

Nikkei ended flat at 21,566.85 and Kospi closed marginally lower at 2,177.62.