Rohit Singre, Senior Technical Analyst at LKP Securities said, “Nifty managed to hold above 14,500 levels, which is the immediate support on the downside for the upcoming sessions. Also, any close below 14,500 levels may put some pressure, but holding above the said levels can result in a good bounce towards 14,600-14,700 levels, which is the immediate hurdle on the higher side.”
“Indian equities pared early optimism and saw a sharp correction as US bond yield rose to its highest level since January. Indian markets witnessed higher volatility compared to its global peers as domestic investors turned extra cautious on increasing Covid cases in India and a fall in FII inflows,” said Vinod Nair, Head of Research at Geojit Financial Services.
That said, here’s a look at what some of the key indicators are suggesting for Friday’s action:
US stocks slump as bond yields surge
The S&P 500 eased from a record high on Thursday while the tech-heavy Nasdaq shed more than 1% as bond yields hit 14-month peak after the Federal Reserve pledged to tolerate inflation and keep monetary policy loose through 2023. The Dow Jones Industrial Average rose 167.72 points, or 0.51% , to 33,182.58, the S&P 500 lost 15.55 points, or 0.39%, to 3,958.60 and the Nasdaq Composite lost 187.08 points, or 1.38%, to 13,337.90.
European shares inch towards all-time highs
Automakers lifted the German DAX to a record high on Thursday, while broader European stocks inched towards all-time highs after the U.S. Federal Reserve vowed to keep interest rates low despite forecasting a surge in economic growth. An index of euro zone’s top 50 companies gained 0.4%, briefly surpassing its peak hit in February last year before the COVID-19 pandemic hammered financial markets.
Tech View: Nifty50 in bear grip
Nifty50 on Thursday tanked for the fifth straight session and formed a bearish candle on the daily chart, the sixth in a row. The steep fall dragged the 50-pack index below its crucial support at the 50-day moving average, with the index now placed near its recent swing low. Analysts said Nifty may face resistance in the 14,630-14,700 zone while support is seen in the 14,450-14,470 range. Aditya Agarwala of YES Securities said the market is in firm bear grip, as it has made lower lows throughout the week.
Check out the candlestick formations in the latest trading sessions
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F&O: VIX needs to cool down below the 20 mark
India VIX was marginally down by 0.40% from 20.15 to 20.08 level. The VIX needs to cool down below the 20 mark for the bullish grip to continue. A decline in VIX even after the 200-point fall in the market is not giving any immediate clues. On the options front, maximum Put open interest stood at 14,000 level followed by 14,000, while maximum Call OI was seen at 15,000 followed by 16,000 level. There was Call writing at strike prices 15,000 and 14,800 and Put writing at 14,200 and 14,100 levels. Options data suggested a wider trading range between 14,300 and 14,900 levels.
Stocks showing bullish bias
Momentum indicator Moving Average Convergence Divergence (MACD) on Thursday showed bullish trade setup on the counters of Tata Motors, Dhani Services, Som Distilleries & Breweries, InterGlobe Aviation, Advanced Enzyme Technologies, Sanginita Chemicals and Bannari Amman Spinning Mills.
Stocks signalling weakness ahead
The MACD showed bearish signs on the counters of Infibeam Avenues, TV18 Broadcast, UPL, SBI Life Insurance, IRB Infrastructure, Zee Media Corp, Just Dial, Grasim Industries, Rana Sugars, Torrent Power, Religare Enterprises, Century Enka, Atul Ltd, Aarti Industries, Geojit Financial Services, Navneet Education, Astral Poly Technik, Cyient Ltd and IIFL Finance.
Thursday’s most active stocks
Tata Motors (Rs 2283.04 crore), ITC (Rs 1981.90 crore), RIL (Rs 1942.71 crore), Infosys (Rs 1477.41 crore), SBI (Rs 1453.93 crore), HDFC Bank (Rs 1359.40 crore), ICICI Bank (Rs 1337.69 crore), Bajaj Finance (Rs 1272.46 crore), TCS (Rs 1127.48 crore) and Tata Power (Rs 1047.95 crore) were among the most active stocks on Dalal Street on Thursday in value terms.
Thursday’s most active stocks in volume terms
Vodafone Idea (Shares traded: 21.76 crore), BHEL (Shares traded: 15.84 crore), PNB (Shares traded: 12.62 crore), Tata Power (Shares traded: 10.27 crore), YES Bank (Shares traded: 9.30 crore), ITC (Shares traded: 9.20 crore), Tata Motors (Shares traded: 7.37 crore), Bank of Baroda (Shares traded: 6.18 crore), Adani Power (Shares traded: 4.99 crore) and Ashok Leyland (Shares traded: 4.80 crore) were among the most traded stocks in the session.
Stocks showing buying interest
Dixon Technologies, Orchid Pharma , Indian Energy Exchange, Adani Power and Sundram Fasteners witnessed strong buying interest from market participants as they scaled their fresh 52-week highs on Thursday signalling bullish sentiment.
Stocks seeing selling pressure
Future Retail, Asian Hotels (West), BCL Industries, B.C. Power Controls, Jiya Eco-Products, Mrs. Bectors Food Specialities, Indigo Paints, Novartis India, Radha Madhav Corporation, Ravinder Heights and Shrenik Ltd witnessed strong selling pressure in Thursday’s session and hit their 52-week lows, signalling bearish sentiment on these counters.
Sentiment meter favours bears
Overall, market breadth remained in favour of bears. As many as 101 stocks on the BSE 500 index settled the day in green, while 396 settled the day in red.
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Its Deja vu! The month of March, a surge in Covid cases and fears of lockdown seem all familiar to ears. Domestic investors were anxious on Thursday over what course state governments will take to tame rising Covid cases. Add to that were concerns over rising bond yields and worries they could trigger FII outflows. The concerns made investors dump equities in otherwise a strong day globally. Sensex plunged 585 points for the day while Nifty fell below 14,600. We spoke to Vinod Nair of Geojit Financial Services to share his views on the market.
