HDFC Securities says that Indian equity benchmark indices witnessed a session marred by a technical outage that disrupted trading on the NSE for nearly four hours. The Nifty opened flat and rose in early trade. The NSE shut trading in its cash and derivative segments at 1140 Hrs, citing “issues” with telecom links of its two service providers, which it said impacted the system and stopped prices from updating.

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Trading resumed on the NSE at 1545 Hrs and indices rose sharply post the second opening due to square off/shifting activities across exchanges. BSE continued to have normal trading in all segments through the extended day.  The trading time on both the exchanges has been extended to 5 pm. 

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At close the NSE Nifty 50 index gained 1.9% to end near the mark of 15000 at 14982. Volumes on the NSE were expectedly lower than the recent average. However volumes on the BSE at Rs.40700 cr were the highest since March 2017, due to diversion of trades to that exchange. Among sectors, Banks, Media, Metals and Realty indices gained the most. Broader markets also ended with gains but underperformed the benchmark indices.
 
Nifty has bounced up well after the 5 day fall seen recently. Although this rise is to be seen in the backdrop of the widespread weakness across Asia, the momentum in the indices could take the Nifty up to 15039-15132 band in the near term. However for the time being it seems as a correction of the recent fall and not a new uptrend.
 
After showing a consolidation movement on Tuesday, Nifty witnessed a hefty gain on Wednesday and closed the day higher by 274 points. After opening on a positive note, Nifty made an attempt to move up in the early part of the session. Meanwhile, the trading in NSE Exchange has halted due to technical glitch at 11.40 am and the market re opened at 3.45 pm, post which resulted in sharp upside movement in the market and Nifty closed near the highs in extended hours.
 
The recent downturn in the market has reversed after consuming 5 sessions of weakness and one session of consolidation movement. This market action is similar to the previous six sessions of decline which occurred in the later part of January and resulted in a sharp upside bounce during union budget 21. This is a positive indication and if this reversal pattern gets confirmed in a day or two, then one may expect continuation of upside momentum in the market.
 
Conclusion: The short term downtrend trend of Nifty seems to be placed at the verge of reversal and further upmove is expected to confirm this turnaround in the market. Further sustainable upmove could confirm reversal pattern and that could pull Nifty towards 15430 levels again. On the flip side, any failure to sustain the gains could bring Nifty back to the support of 14650 in the near term.