01-01-1970 12:00 AM | Source: HDFC Securities Ltd
Indian markets could open higher, in line with positive Asian markets today and despite flat US markets on Thursday - HDFC Securities
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Indian markets could open higher, in line with positive Asian markets today and despite flat US markets on Thursday - HDFC Securities

U.S. stock benchmarks finished an up-and-down day mixed, with the Nasdaq Composite managing to register a slight gain, as August retail sales showed an unexpected rise and a measure of activity in the Federal Reserve’s Philadelphia district came in stronger than expected. Data showed August retail sales rose 0.7%, defying forecasts for a 0.7% fall. Excluding autos, sales jumped 1.8%, compared with expectations for a rise of 0.2%. Separately, the Philadelphia Fed’s activity index jumped to 30.7 in September from 19.4 a month earlier. At the same time, data showed first-time claims for unemployment benefits rose more than expected in the week ending Sept. 11 (+20000 to 332000 vs 320000 expected), though continuing claims fell.

Markets dipped globally on Thursday as concerns about investments in China and a down day on Wall Street outweighed positive economic data in the United States. International investors that have been piling into China in recent years are now bracing for one of its great falls as the troubles of over-indebted property giant China Evergrande come to a head. The developer's woes have been snowballing since May. Dwindling resources set against 2 trillion yuan ($305 billion) of liabilities have wiped nearly 80% off its stock and bond prices, and an $80 million bond coupon payment now looms next week.

The Union Cabinet on September 16 approved a government guarantee of up to Rs 30,600 crore for security receipts to be issued by National Asset Reconstruction Company Ltd (NARCL). Security receipts represent an undivided right or interest in a financial asset. Typically, asset reconstruction companies or a bad bank buy distressed assets paying 15 percent cash and the balance 85 percent in security receipts. Asian stocks were steady early Friday as traders weighed risks from China to the global recovery and the prospect of reduced Federal Reserve stimulus.

Nifty closed at record highs for the third consecutive session on Sept 16 aided by Banks & FMCG shares. At close the Nifty was up 0.63% or 110 points at 17630. Nifty continued to march upwards on Sept 16; however, the advance decline ratio has fallen below 1:1 denoting profit taking across the broader markets. Sector and stock rotation among the largecaps is witnessed. 17740 is the next target for the Nifty while 17519 could be the support for the near term.

 

Daily Technical View on Nifty

Nifty : Continuation of an Uptrend

* After breaking out from the consolidation, Nifty continued to rally upwards for the second consecutive session

* Nifty registered a fresh all time high at 17644 and closed near day’s high

* BankNifty showed significant outperformance over Nifty by rising more than 2.2%

* Private and PSU bank both performed very well in the session and helped the BankNifty to surpass previous all time high of 37708.

* Despite the strength in Benchmark Indices, Breadth of the market remained negative at NSE with 9:10 advance –decline ratio

* BankNifty closed on a very strong wicket and it looks like that, the rally would continue with rising momentum.

* RSI oscillator has reached overbought zone on daily and hourly chart but there is no sign of negative divergence, which can be considered bullish.

* Daily ADX indicator has been rising for Nifty and BankNifty both, which indicates the strong momentum

* Traders should follow the levels given in the table above and keep on trailing the stoplosses in trading long positions.

Nifty – Daily Timeframe chart

 

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