look news india
Ahead of the start of the trading session in the Indian stock market today, investors and intraday traders are keeping an eye on global cues and key domestic macro triggers. Initial trends of GIFT Nifty are indicating mild positive to range-bound trading, but the rise in Brent Crude amid the US Federal Reserve’s stance on interest rates and geopolitical tensions is creating a major resistance for the domestic indices. In the last few sessions, Nifty 50 and Sensex have seen consolidation and profit booking from upper levels. In such a situation, before entering any new trade today, it is important to understand those major developments, which will directly decide the direction of the market.
The biggest pressure in the domestic market at present is coming from the continuous selling by foreign portfolio investors (FPIs/FIIs). In the month of October, foreign investors have sold on a large scale in the cash market, the main reason for which is the strength of the US dollar index and the high bond yields. On the contrary, domestic institutional investors (DIIs) have driven the market with strong buying at lower levels driven by record SIP inflows into mutual funds. If the pace of FII selling slows down in the early hours today, short covering can be expected from lower levels.
Brent crude prices remain at high levels in the international market, which is a sensitive indicator for the Indian economy and current account deficit (CAD). Rising crude oil prices directly put pressure on the margins of oil marketing companies (OMCs), paints, tires and specialty chemicals companies. If there is a further rise in crude, then profit-booking in these sectors may deepen, while upstream oil producers (like ONGC and Oil India) may directly benefit from it.
The second quarter results of companies are at their peak and the market is now keeping a close eye on the actual performance and future guidance of the companies. Data from IT, banking, auto and consumer durables companies are generating stock-specific action. Companies whose results and margins are better than expected are witnessing a sharp rise, while stocks with weak commentary are witnessing sharp selling. Today traders are advised to pay special attention to sector rotation (like defence, healthcare and select PSU stocks).
According to derivatives data (Option Chain), the technical levels for today’s session are quite clear:
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Nifty 50: The level of 22,600 to 22,550 is acting as a very strong support zone for Nifty. If Nifty slips below this level, the fall may stretch to 22,400. On the upside, the range of 22,850 and 22,950 is a tough resistance. Unless the index closes above 22,950, there will be a risk of profit-booking on every bounce.
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Bank Nifty: The level of 53,800 is an important base for the banking index. If it goes below then the next support of 53,400 will open. In case of recovery, 54,400 to 54,600 levels will prove to be the first major hurdle area.
In today’s session, some major shares may remain in special turmoil due to news:
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Recently Listed New-Age and Healthcare Stocks: Shares of recent IPOs like Jio Platforms and Paras Healthcare will remain active after listing due to delivery volumes and institutional buying.
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Auto and Consumer Stocks: Due to festive demand and festive season vehicle sales figures, the focus will be on Maruti Suzuki, Bajaj Auto and Tata Motors.
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Infrastructure and Capital Goods: This sector may appear to be in a strong position due to new orders received by Larsen & Toubro (L&T) and major government infra companies.
Today traders should avoid creating aggressive long positions and use strict stoploss along with ‘buy on dips’ strategy (selective buying at lower levels).