The positive undercurrent in global markets had a rub-off effect on local equities, as investors resorted to short-covering after last week’s correction helping key benchmark indices recapture their psychological levels.
With China steadily lifting covid restrictions, there are hopes that demand may pick up moving ahead. This could give breathing space for markets already battling recession fears, higher interest rate regimes, and benign inflation levels.
Despite the recovery, markets may remain choppy as most of the lingering worries are yet to subside. A bullish candle on the daily charts and a reversal formation indicate a further uptrend from current levels.
For bulls, 18000 would be the sacrosanct support zone, and above the same, the pullback formation will continue till 18200-18270. On the flip side, below 18000, the uptrend would be vulnerable and the index could retest the level of 17950-17900.
Market update by: Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.