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Indian markets could open flat to mildly lower following mixed Asian markets today and despite negative US markets on Wednesday - HDFC Securities

Wall Street ended the session in negative territory on Wednesday as investor risk appetite was curbed by surging consumer prices, which stoked worries of a protracted wave of hot inflation. A poorly received auction of $25 bn long-dated U.S. government bonds midday didn’t help the market’s complexion either.

The U.S. consumer price index surged 6.2% on an annual basis (up from 5.4% in September and more than three times the Fed’s goal of a 2% rate), with gasoline leading a broad-based increase that added to signs that inflation could stay uncomfortably high well into 2022 amid snarled global supply chains.

Gold jumped to a five-month high and bitcoin hit a record as investors sought inflation hedges. Oil pulled back sharply from near seven-year highs after U.S. President Joe Biden said his administration was looking for ways to reduce energy costs.

japan's wholesale inflation hit a four-decade high in October (8% vs 6.4% in September), following a similar spike in China's factory gate prices as supply bottlenecks and rising commodity costs threatened Asian corporate profits.

In India the MF SIP book continues to post healthy progress and was at Rs 10,518 crore for the month, compared to Rs 10,351 crore in September 2021. The number of SIP accounts also went up to 4.64 crore from 4.48 crore in the same period. Inflation fears pressured Asian stocks on Thursday after data overnight showed U.S. consumer prices surged at the fastest pace since 1990 last month, boosting the case for faster Federal Reserve policy tightening.

Nifty closed lower for the second consecutive session on Nov 10. At close, Nifty was down 0.15% or 27 points to 18017.2. Nifty closed almost flat for the second consecutive session with the advance decline ratio falling to slightly in the negative. As compared to the previous session, it made a lower high. 18113 on the upside is the resistance level to watch while 17836 is the support level to protect in the near term.

Daily Technical View on Nifty

Market: Observation

* Markets ended with modest losses on Wednesday. The Nifty finally lost 27.1 points or 0.15% to close at 18,017.2.

* Broad market indices like the BSE Small Cap index ended higher, thereby out performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Nifty: 15 min charts indicates consolidation

* Zooming into the 15 minute chart, we can see that the Nifty opened on a negative note, but soon recovered from the lows to move into positive territory. A minor sell off towards the closing led to the Nifty closing with modest losses.

* The 15 min chart indicates that the Nifty has a trend line support around the 17850 level. So the Nifty could consolidate in a range for a few more sessions between the 17850-18100 levels.

Nifty: 20 day SMA still acting as a resistance

* On the daily chart, the Nifty has recently bounced back strongly from the 50 day SMA and is now hovering just below the 20 day SMA.

* Broad market indices like the Nifty Mid Cap and Small Cap indices have however crossed their 20 day MA indicating a positive bias. We therefore believe it is only a matter of time before the Nifty index recovers and moves above the 20 day SMA as it resumes its intermediate uptrend. Crucial supports are now at 17915.

Nifty – Daily Timeframe chart

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