Wild ‘Oversold’ Stock Market Tests Equity Traders Amid Turnaround
Stock Market on Thursday.. (Image credit X.com)
Nifty Bounces in Early Trades as Resistance Holds
By S Jha
New Delhi, February 19: Nifty once again bounced from around the 22800 level on Wednesday. Bank Nifty led the turnaround in the equity market with sharp gains in early trades.
The 50-share index was trading with minor gains in the first hour of the trades. Nifty touched the low of 22814 to stage a bounce back. Brokerages sounded out customers on Wednesday morning that the stock market is now in an “oversold territory”.
The RSI indicator gave a buy signal to traders on Wednesday morning, said brokerage firm Angel in a note to customers on Wednesday. Nifty in the last few days has tested and even breached the level of 22800 on several occasions.
But the 50-share index has so far defended the 22800 level. This is seen as signs of strength in the broader market by participants. They spotlighted strong fightback by the domestic institutional investors (DIIs) against the selloff by the foreign institutional investors.
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Bank heavyweights – IndusInd, SBI, Axis Bank, and Kotak Mahindra Bank – led the turnaround in the stock market on Wednesday. Bank Nifty has also been able to defend levels around 48500 amid evident bearish sentiments in the broader market.
Traders are eying rupee for cues in the market. Rupee was trading at ₹86.91 against dollar on Wednesday. The intervention of the Reserve Bank of India (RBI) to defend rupee is seen as sign of relief in the financial markets.
Sources said that the Ministry of Finance is also keeping a watch on the selloff in the capital market. Sources said that the rupee may be defended against further depreciation.
Stability in the currency market is being seen as sign of an early relief by the market participants. The US-Russia meeting in Riyadh in Russia is also seen as a favourable cue by the market participants.
Traders are hopeful that the end of the Ukraine War may cool off crude oil prices which could be a net positive for the equity markets in India. They are also hopeful that the trade off in tariff war may minimise adverse impacts on India.
Banking and metal indices led the charge on the street on Wednesday. The IT index remained weak even while traders claimed that weak rupee may boost revenue of such firms.
Traders are hoping for a relief rally in the stock market. They are hopeful that there may may be reversal in the fortunes of scrips which have been battered in recent weeks.
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