Domestic equity benchmarks the Sensex and the Nifty clocked gains of more than two percent each, ending in the green for the second consecutive session on March 9.
The market witnessed buying as investors found the valuation of equities attractive after the recent selloff. Besides, the market sentiment also improved after the exit poll suggested in-line state election outcomes.
"Domestic indices carried forward yesterday’s gains following a clawback in European markets and US futures as smart investors saw value in the current market valuations. Oil prices continued to rise after the US banned Russian oil imports. The domestic market is also reacting positively to exit polls and in anticipation of in-line state election results," said Vinod Nair, Head of Research at Geojit Financial Services.
In the near term, the domestic market is likely to trade as per the positive or negative surprise in the state election results and global trend.
Global cues remained uncertain as the Russia-Ukraine war entered its 14th day. As per news agency AFP, Russia foreign ministry spokeswoman Maria Zakharova indicated that some progress had been made, referring to three rounds of talks. Several media reports suggested that Ukraine President Volodymyr Zelenskyy has said he is no longer insisting on NATO membership for his country which was a key reason why Russia started a war with the country.
Crude oil prices rose, trading near $129 a barrel, but remained low from the March 7 level of $139. The rupee ended 0.45 percent higher at 76.56 per dollar.
"D-Street bulls finally held the upper hand today on reports suggesting that the Ukrainian President is no longer pressing for NATO membership. With Covid behind, short-covering coupled with the exit poll results buoyed the bulls as benchmark indices rose almost 3 percent in late afternoon trade with major sectoral indices ending in the green," S Ranganathan, Head of Research at LKP securities, observed.
Sensex closed 1,223 points, or 2.29 percent, higher at 54,647.33 while the Nifty settled with a gain of 332 points, or 2.07 percent. BSE Midcap and smallcap indices rose 2.37 percent and 2.16 percent, respectively.
Among the sectoral indices, barring BSE Metal (down 0.69 percent), utilities (down 0.10 percent) and power (down 0.03 percent), all sectoral indices ended in the green. BSE Energy, realty, auto and consumer discretionary goods & services rose up to 3 percent.
In the last two sessions of trade, the overall market capitalisation of BSE-listed firms rose to ₹248.3 lakh crore from ₹241.1 lakh crore on March 7, making investors richer by ₹7.2 lakh crore in two days.
What should investors do?
Analysts still suggest buying only quality stocks as the market may remain volatile reacting to domestic as well as global cues.
Technically, the market witnessed a bounceback from the oversold territory but Nifty has to sustain gains which will confirm an uptrend.
Santosh Meena, Head of Research, Swastika Investmart, pointed out that 16,400 is a critical hurdle and Nifty has to sustain above this to gain further strength for a move towards the next important hurdle at 16,800.
On the downside, 16,200 will be immediate support while 15,900 will be the next important support, Meena said.
"The market continues to stay positive after the market breach the level of 16,150-16,200. A significant breakout above the levels of 16,400-16,450 could result in improvement of market breadth and the market can rally to the levels of 16,800. Momentum indicators like RSI and MACD are indicating positive side recovery in the market," said Vijay Dhanotiya, Lead- Technical at CapitalVia Global Research.