Dear Trader…
Markets rebounded after the recent slide and gained nearly a percent amid mixed cues. After the initial uptick, Nifty drifted lower in the early hours however recovery in select index majors across sectors gradually pushed the index higher as the session progressed. It finally settled around the day’s high to close at 17,123.6 levels. On the sectoral front, banking, FMCG and energy were among the top gainers while pharma and metals traded subdued.
We feel it’s just a respite in a corrective phase and the tone would remain negative until Nifty decisively reclaims 17,400 levels. Amid all, the buoyancy in the banking space is capping the damage so far while others are seeing a mixed trend. We feel it’s prudent to stay light in the prevailing scenario and keep the existing positions hedged.
Nifty futures opened at 17011.00 points against the previous close of 16978.20 and opened at a low of 16951.05 points. Nifty Future closed with an average movement of 182.85 points and a rise of around 142.80 points and 17121.00 points...!!
On the NSE, the midcap 100 index will rise 0.62% and smallcap 100 index is closing rise 0.80%. Speaking of various sectoral indices, only Media saw stocks were seen selling on the NSE, while all other sectoral indices closed higher.
At the start of intra-day trading, December er gold opened at Rs.50814, fell from a high of Rs.51049 points to a low of Rs.50762 with a decline of 166 points, a trend of around Rs.50930 and December Silver opened at Rs.58000, fell from a high of Rs.58120 points to a low of Rs.57584, with a decline of 793 points, a trend of around Rs.57742.
Domestic equities gained strength after the initial hiccups as value buying at lower levels helped market to recover. Further, spike in Dow futures too supported the Indian markets. Nifty managed to sustain above 17k zones and closed with gains of 140 points (+0.8%) at 17124 levels. Barring Media, all other sectors ended in green. Banks and financials were top gainers on back of expectation of healthy Q2 earnings. Going forward we expect market strength would continue until Nifty is able to sustain above 17k levels. However concrete direction would be provided by global factors and inflation data in the near term.
The domestic market was successful in overcoming the weak cues from global peers as it focused on quarterly earnings. The IT earnings season got off to a strong start, which improved the sector's spirits. In the midst of escalating geopolitical unrest and the prospect of a worldwide economic downturn as the IMF revised down its forecast for global growth, European markets continued to slide. At the same time, oil prices dropped due to sluggish demand amidst recession fears and tightening curbs in China, which was taken positively by the domestic market.
Technically, the important key resistances are placed in Nifty future are at 17170 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 17202 – 17232 levels. Immediate support is placed at 17007 – 16808 levels.
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