Dear Trader…
Domestic equities witnessed resumption of selling after one day of relief. Nifty opened positive but soon gave up its initial gains to close with loss of 176 points (-1%) at 17925 levels. Except Auto, all sectors ended in red. Profit booking in Bank & Financials, Technology along with Metal stocks dragged the indices lower. Q3 earning season has kick started with TCS announcing an inline performance. the company however remains cautious about the demand environment over the next two quarters.
Domestic equities have been witnessing wild swings in last few days as series of events have kept investors on edge. Some volatility was also led due to cautious environment globally ahead of US Fed Chair Powell’s speech. We expect Nifty to move in a broader range ahead of various events like US Fed speech, release of US, India and Europe CPI data. However, expectation of healthy earnings could cap the downside.
Nifty futures opened at 18173.20 points against the previous close of 18173.20 and opened at a low of 17925.15 points. Nifty Future closed with an average movement of 252.85 points and a decline of around 186.95 points and 17986.25 points...!!
On the NSE, the midcap 100 index will decline 0.50% and smallcap 100 index is closing decline 0.59%. Speaking of various sectoral indices, the NSE saw gains in only Auto stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, February gold opened at Rs.55920, fell from a high of Rs.55950 points to a low of Rs.55700 with a decline of 156 points, a trend of around Rs.55708 and January Silver opened at Rs.68671, fell from a high of Rs.68694 points to a low of Rs.68081, with a decline of 745 points, a trend of around Rs.68155.
Sentiments remained up-beat with Commerce and Industry Minister Piyush Goyal’s statement that negotiations for bilateral free trade agreements with several countries are ‘well on track’ and India is also looking at some multilateral pacts that are fair and equitable for all the member countries. Buying further crept in with Crisil Ratings’ report stating that capital goods companies are poised to see revenue growth at a healthy 16-18 per cent during current financial year ending March 2023 on account of improved order flows. Revenue growth in the next financial year starting April 2023 too is expected to be in double digits.
However, markets trimmed some gains in late afternoon deals, as some pessimism came with advanced estimates of National Income for 2022-23 revealed by the National Statistical Office (NSO) showing that Indian economy is likely to grow at 7 per cent in 2022-23 as compared to 8.7 per cent in 2021-22. The fall will mainly be due to poor performance of the manufacturing sector. Some cautiousness came as foreign institutional investors (FII) net sold shares worth Rs 2,902.46 crore on January 6, as per provisional data available on the NSE.
But, markets regained traction to end higher, as some optimism remained among traders with Finance Minister Nirmala Sitharaman’s statement that the central government is engaging with states and local administrations to ensure that benefits of Ease of Doing Business (EoDB) initiatives reach the ground. She said EoDB is not just the Centre's responsibility but that of states as well.
Technically, the important key resistances are placed in Nifty future are at 18008 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 18088 – 18108 levels. Immediate support is placed at 17878 – 17808 levels.
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