Diwali this year has brought cheer to the markets. After last week's sharp market fall, the Sensex and Nifty began Samvat 2078, the Hindu New Year, on a positive note. In the one-hour special trading session held by the BSE and National Stock Exchange (NSE) on Diwali, Sensex rose 306 points or 0.51 per cent to close at 60,078. The Nifty index gained 87 points or 0.49 per cent at 17,916. Leading analysts told Business Line that internal structure suggests that India's markets had embarked on a multi-year bull run.

US bond buying plan

The gains in markets were supported by buoyant global cues after the US Federal Reserve said that it was going to cut down its bond buying programme by only $15 billion every month. The Fed purchases bonds and treasures worth more than $105 billion. Markets were expecting a higher taper by the Fed. The US markets hit a new record after the Fed decision.

"On the technical charts, overall 2021-2039 seems like the best period for Indians similar to what the US markets saw between 1982-2000. In that terms Samvat 2078 is just the beginning," said Rishi Kohli, Managing Director & CIO – Quant Strategies, Avendus Capital Public Markets Alternate Strategies LLP.

Kholi is of the view that in the early part of 2022 markets could witness some fall when the 14 day relative strength index, which is the momentum indicator of the markets, touched 80.

"If you consider the RSI currently, the markets appear oversold and hence the rally will continue. Even though small corrections come, the overall trend remains on the up and the bull run is likely to continue," said Kholi.

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