Entering the new week, SGX Nifty was up with gains, suggesting a gap-up start for equity indices. Global cues were positive.
Domestic stock markets suffered heavy losses last week as Sensex and Nifty nosedived more than 3.7% each. S&P BSE Sensex settled at 52,793 on Friday, falling 3.72% during the week while Nifty 50 ended up at 15,782, down 3.83% after the five trading sessions of last week. India VIX is now placed above 23 levels as volatility continues to remain a concern. Rising inflation, interest rate hike cycle, and geopolitical worries continue to weigh down on Dalal Street. Entering the new week, SGX Nifty was up with gains, suggesting a gap-up start for equity indices. Global cues were positive during the early hours of trade on Monday.
Global Watch: On Friday, Wall Street moved higher. NASDAQ, S&P 500, and the Dow Jones closed with gains and the up-move was mirrored by Asian stock markets on Monday. Shanghai Composite, Hang Seng, Nikkei 225, TOPIX, and Kosdaq were all up with gains. KOSPI was down with losses.
What do the charts say: With the continued weakness on Dalal Street, a long body of negative candle was formed on Nifty’s daily chart with a long upper shadow and a long bear candle was formed on the weekly chart with a minor lower shadow, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Technically, this pattern indicates a lack of strength in the market to sustain the highs,” he added.
Levels to watch out for: After the sharp fall last week, Nifty’s support is now at 15670 below which 15450-15500 will be on cards, said Ruchit Jain, Lead Research, 5paisa.com. “On pullback moves, the index once again resisted around the hourly ’20 EMA’ which is now at 16000 mark. A move above 16000-16075 is now required for any price-wise pullback move in the coming week,” he added. Meanwhile, Nagaraj Shetti said that the presence of crucial support as per the monthly timeframe and the overall weekly chart pattern indicates a chance of important bottom reversal around 15500-15400 levels.
FII and DII trades: Foreign Institutional Investors continued to sell domestic stocks. FIIs pulled out Rs 3,780 crore from markets on Friday alone. Domestic Institutional Investors (DII) were once again net buyers, pumping in Rs 3,169 crore into the Street.
IPO market remains active: This week, the shares of LIC will list on the bourses. The much-awaited LIC IPO garnered nearly 3 times subscriptions with all categories of investors oversubscribing their portion of the largest ever IPO. Alon with this, primary markets will witness the IPOs of Paradeep Phosphates and ETHOS limited open for investors to bid. Paradeep Phosphates has already raised Rs 450 crore from anchor investors.