Market Closing Podcast on May 24, 2018

A strong day for Indian markets supported by short coverings as the S&P BSE Sensex rallied over 300 points and the Nifty50 managed to close above 50-days moving average and 100-DEMA on Thursday.

The Nifty bucked the trend as most of the Asian markets closed mostly lower as investors turned cautious over the fresh trade-related developments between the U.S. and China. However, what might have worked in favour of markets is the US Fed minutes.

The US Federal Reserve’s latest meeting suggested higher inflation may not result in faster interest rate hikes. Most Fed policymakers thought it likely another rate increase would be warranted “soon” if the U.S. economic outlook remains intact, and many participants saw little evidence of general overheating of the labor market, said a Reuters report quoting minutes of the central bank’s last policy meeting showed.

“The market managed to end higher in a volatile trading session, taking cues from dovish Fed minutes and softening of crude oil prices. Besides, the report stating considerable rise in direct tax collection in the last financial year further boosted the sentiment,” Jayant Manglik, President, Religare Broking Ltd told Moneycontrol.

“Initially, IT majors pushed the benchmark higher which later joined by others in the second half. However, pressure remained on the broader front as a result both midcap and smallcap index ended lower,” he said.

Commenting on the market action, Manglik said that it's too early to call this bounce as a reversal and thus advise waiting for confirmation before jumping into a trade. “Private banks, IT and FMCG counters should be preferred for buying while the further recovery in PSU banks and metal would attract fresh shorts,” he said.

The S&P BSE Sensex closed 318 points higher or 0.93 percent at 34,663.11. It rose to an intraday high of 34,741.46, and a low of 34,367.83.

The Nifty50 rose 83 points or 0.8 percent to close at 10,513. It hit an intraday high of 10,535, and an intraday low of 10,419 in trade today.

Sectorally, the S&P BSE IT index rose 2.4 percent, followed by the S&P BSE telecom index which rose 2.2 percent, and the S&P BSE Metal index closed 1 percent higher.