Week Ahead...

Last week BSE Sensex climbed 841 points or 1.4 percent to 59,833, and the Nifty50 rose 239 points or 1.4 percent to 17,599, supported by banking and financial services, auto, pharma, and infrastructure stocks.

The broader markets also traded higher with the Nifty Midcap 100 and Smallcap 100 indices gaining 1 percent and 2 percent.

After yet another encouraging week, the momentum is expected to continue along with some volatility in the holiday-shortened week beginning April 10 with focus on corporate earnings, inflation data, global news flows, and FOMC minutes.

The corporate earnings season for the March FY23 quarter will be kicked off by index heavyweights Infosys on April 13, Tata Consultancy Services on April 12, and HDFC Bank on April 15.

Growth in quarterly earnings is likely to be driven by the banking and financial services, and auto sectors, while metals and mining may be hit significantly by a fall in commodities and low realisation.

Technically Nifty has formed bullish candlestick pattern on the weekly scale, with making higher top higher bottom for second consecutive week, and the momentum indicator RSI (relative strength index) giving a nice positive crossover. Also the index climbed back above 50-week EMA (exponential moving average - 17,426), which is another positive sign.

Nifty has been in the timewise correction from past few months and has given strong reversal from the key support area in the last few days which is the first sign of strong base formation around the 16,700-16,800 levels.

Among the technical levels, 17,800-18,100 will be the near-term hurdles and above that new highs can be expected in the next couple of quarters.