Sensex still with bullish bias

On Wednesday, the benchmark indices held the positive momentum. BSE Sensex was up by 85 points. Among sectors, Metal index was the top gainer, rallied over one percent, whereas intraday profit booking was seen in selective IT stocks.

After early morning intraday sell off once again, the market took the support near 63,000pts and bounced back sharply, but it failed to surpass the important level of 63,000pts. We are of the view that, the short-term formation of the market is still in to the bullish side. But below 63,000, we could see a quick intraday correction. For the traders now, 63,300 would be the immediate breakout level to watch out. Above the same, the index could rally till 63,600-63,800.

“We are of the view that, the short-term formation of the market is still in to the bullish side, but below 63,000pts, we could see a quick intraday correction,” says Shrikant Chouhan, head (equity research- retail), Kotak Securities. On the other side, below 63,300 the selling pressure is likely to accelerate. Below which, the index could retest the level of 62,700-62,600.

Vinod Nair, head (Research) at Geojit Financial Services, said: “The domestic indices rebounded after an initial phase of profit booking, driven by encouraging WPI inflation data and positive global cues, while selling in IT and banking stocks kept a check on gains.”

The favourable decline in US inflation, driven by lower energy prices, and speculation about a potential pause in the Fed rate hike campaign, brought comfort to global equities, he said. However, the persistence of higher core inflation levels may compel the Fed to maintain its hawkish tone during Wednesday’s policy announcement, with indication of a prolonged pause.