Nifty broke a two day losing streak on April 26 becoming the best performing index in the Asian region
Trends in SGX Nifty indicate a gap-down opening for Indian indices. Indian markets could open lower in line with negative Asian markets today and sharply lower US markets on Tuesday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
Nifty broke a two day losing streak on April 26 becoming the best performing index in the Asian region. At close Nifty was up 1.46 percent or 246.9 points at 17,200.
Nifty rose with an upgap on April 26 and in the process made a bullish island reversal pattern. It is important for the Nifty not to go below 17,054 so that the bullishness of the pattern is not negated. Low volumes accompanied by positive advance decline ratio means that FPIs were not aggressive on the sell side but at the same time local traders chose to focus more on the large and midcaps. 17,009-17,315 could be the band for the Nifty in the near-term, Jasani added.
The market is seen heading southward in early trades much in tandem with the rout in other global indices amid concerns about global economic growth stemming from China, said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.
As on date, the world economy once again finds itself in a problematic position due to growth concerns amidst renewed COVID surge in China and Russia’s Ukrainian invasion.
Our call of the day suggests Nifty may trade volatile with interweek support seen only at 16597 mark. Intraday support for the index is seen at the psychological 17000 mark. To regain momentum on the buy side, Nifty needs to stay above its 200-DMA at 17207 mark, Tapse added.
Mohit Nigam, Head – PMS, Hem Securities said, markets are likely to get gap-down opening as an uptick in oil prices and the Russia-Ukraine conflict continued to weigh on market sentiment. Traders may take note of Acting Director of the IMF’s Asia and Pacific Department stating that the surge in oil prices due to the Ukrainian war has pushed up inflation in India, which needs monetary tightening and measures to address structural weaknesses to improve growth potential.
There will be some reaction in edible oil industry stocks with private report that India’s palm oil imports in May are set to rise above 600,000 tonnes despite the restriction imposed by Indonesia.
Bulls made come back after two days of continuous drubbing as traders opted to buy beaten down but fundamentally strong stocks. Key gauges made a gap up opening taking encouragement with CII President TV Narendran’s statement that India’s economy is expected to grow 7.5-8 percent this fiscal year with exports playing a key role in the country’s success story.
Some support also came with report that India and the EU will return to the negotiating table to start serious talks for a free trade agreement (FTA) in June after a gap of nine years.
On technical front, Nifty50 may take support at 17,200 levels and may face resistance at 17,450 levels. In case of Bank Nifty immediate support and resistance levels are 36,000 and 36,850 level respectively, Nigam added.
On April 26, at close, the Sensex was up 776.72 points or 1.37 percent at 57,356.61. The broader Nifty was up 246.80 points or 1.46 percent at 17,200.80.
Elsewhere, Asian stocks declined on Wednesday amid mixed corporate earnings, worries that Russia may choke gas flows to Europe, China’s pandemic struggles and the prospect of aggressive Federal Reserve monetary tightening.
In the US, stock benchmarks ended sharply lower Tuesday, with the Nasdaq Composite booking its lowest close since 2020, as investors sifted through a raft of company results and awaited earnings reports that came after the bell from tech giants, including Microsoft Corp. and Google parent Alphabet Inc.
China’s COVID-19 curbs and fears of aggressive U.S. Federal Reserve tightening continued to damp risk appetite. The CBOE Volatility Index jumped to around 33 on Tuesday. The yield on the 10-year US Treasury note fell 5.2 basis points to 2.773 percent.
