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Indian markets could open flat to mildly higher, following largely negative Asian markets today and negative US markets on Thursday - HDFC Securities 

U.S. stock indexes closed down but off the session’s lows on Thursday, as investors digested economic data showing little improvement in the labor market and weighed a rise in bond yields on worries over potential inflation amid elevated commodity and energy prices.

An increasing pace of coronavirus vaccinations, declining case numbers, good quarterly corporate earnings, and hope for a better economy in the second half of 2021 have helped to lift stocks to record highs this month but investors are now finding fewer reasons to drive stocks higher.

A reading of trade showed that U.S. import prices jumped 1.4% in January, marking the biggest increase since 2012. Weekly jobless claims came in at 861,000, marking the highest level in a month. A reading of manufacturing activity in the Federal Reserve’s Philadelphia region, the Philly Fed Manufacturing Index, fell to 23.1 in February from 26.5 in the prior month.

State-run Oil India (OIL) and Engineers India (EIL) have decided to jointly bid for acquiring Bharat Petroleum Corporation's (BPCL) stake in Numaligarh Refinery (NRL). IDFC First Bank Ltd. plans to raise as much as 30 billion rupees ($413 million) selling shares in its second fund raising proposal in less than a year.

Asian stocks were set to pull back on Friday, following a dip on Wall Street as disappointing U.S. jobs data fanned concerns the economic recovery from the coronavirus was losing momentum. Indian benchmark equity indices ended in the negative territory for the third consecutive session on February 18. At close, the Nifty was down 90 points or 0.59% at 15118.

Nifty closed well below its short-term averages for the first time since the Union Budget suggesting more weakness may follow. However, positive advance-decline ratio and buoyancy in the Midcap and small-cap Indices suggest investors are rotating money away from larger stocks. 14977-15078 could be the next support band for Nifty. On rise, 15315 could act as short-term resistance.

RBI gives nod to Piramal to take over DHFL: The Reserve Bank of India has given the nod to Piramal Group led by billionaire Ajay Piramal for the takeover of Dewan Housing Finance Corporation Ltd (DHFL). The lenders are now in the process of taking the proposal to the National Company Law Tribunal (NCLT). RBI’s approval comes a month after the Piramal Group won the bidding for the bankrupt mortgage lender.

Daily Technical View on Nifty

Observation: Markets ended lower on Thursday after a shaky opening. The index gradually slid lower after a positive morning session. It was the third consecutive negative closing for the Nifty. The Nifty finally lost 89.95 points or 0.59% to close at 15,118.95.

Broad market indices like the BSE Mid Cap and Small Cap indices gained more, thereby out performing the Sensex/Nifty. Market breadth was positive on the BSE/NSE.

Zooming into the Nifty 15 min charts, we observe that the Nifty opened marginally higher before selling emerged and pushed the index lower. In the process, the Nifty broke the intra day upward sloping trend line that has held the lows of the last two weeks.

With the index also trading below the 20 and 50 period moving average on the intra charts, the bias seems to be negative for the very near term. We expect the Nifty to test the immediate support of 14977 in the very near term

On the daily chart, we can observe that the Nifty remains in a comfortable uptrend and well above its 20 day and 50 day SMA. Short term momentum indicators like the 14-day RSI have however corrected which indicates a weakening of momentum.

While we remain open to corrections in the near term, we expect the index to make new life highs in the coming sessions. It is important that the Nifty does not move below the support of 14977 on any corrections for the short term uptrend to remain intact. A close below 14977 could trigger a swift correction that could take the Nifty down towards the 20 day SMA, currently at 14739.

Conclusion: The 1-2 day trend of the Nifty remains down with the Nifty closing below an intraday trend line and also below the 20 and 50 period MA on the intra chart. Nifty is likely to test the 14977 levels in the very near term. Our 7-day view on the market continues to remain bullish as the Nifty remains in a healthy uptrend on the daily chart. Our bullish bets for the next 7 sessions would be off if the Nifty moves lower and closes below the 14977 levels.

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