Markets dragged lower on the back of expiry day jitters and closed the session on a negative note. Nifty kept making lower lows from early trade to eventually close the day at the lower end of the trading range at 5785 down 48 points. The broader market performed in line with the benchmarks; S&P CNX 500 was down 0.80% and CNX Midcap was down 0.73%.

Markets have indulged in a time correction for the last few days which has concurred with the expiry week. It almost seems like the market has been waiting for the April series expiry to go by before envisaging its next directional course. The trend has been sideways for the last few days and no significant violation of levels has occurred for us to warrant any change to our broader view.

The psychological Indicators still favour the bulls and hence accumulation at lower levels cannot be ruled out going forward. On the upside, the level of 5950 remains an important hurdle and a move above it is awaited for a sustained upmove. Since, the hangover of the expiry is now done, the markets can begin tomorrow on a clean slate and the next few days’ development could well be the trendsetter for the market in May.

On the other hand, our observation of the recent performance of the Midcap Index strengthens our positive stance in this index for the medium term. We retain our target of 8900-9000.