IGI Logo

Indian markets could open mildly lower, in line with mostly lower Asian markets today and negative US markets on Monday - HDFC Securities

All three major U.S. stock indexes finished lower Monday, posting their largest one-day point drops in a week, as investors remained focused on the release of fresh inflation data and third-quarter earnings this week. Wednesday’s U.S. consumer-price report for September is the next major data release in the week ahead. Higher commodity prices and bond yields in Europe also weighed on stocks. The U.S. bond market was closed for Columbus day. Soaring oil prices that hit multi-year peaks stoked fears about rising prices and tighter monetary policy, lifting the dollar to a near-three-year high against the yen. Analysts have expressed concern that supply-chain issues that have spread throughout the global economy will compress profit margins, and that rising inflation will limit consumer demand.

Asian stocks fell Tuesday on concerns about elevated inflation stoked by energy costs and the possibility of a widening Chinese crackdown on private industry clouding investor sentiment before the U.S. corporate earnings season. A report suggesting Beijing is widening scrutiny of private industry by examining ties to state banks soured the mood.

Nifty lost more than half of the intra day gains by the end of the session but still ended in the positive for the third consecutive session on Oct 11. At close Nifty was up 50.7 points or 0.28% at 17946. Expectedly Nifty reached 18000 and corrected from there. The Nifty could meander around this level for a few more sessions before taking any one direction, most likely up. Advance decline ratio ended in the positive though weaker than that in the morning. Sector and stock specific rotation could be witnessed going ahead while the index could remain in a range.

Daily Technical View on Nifty

Market: Observation

* Carrying on from last Friday, markets rallied further on Monday to close with healthy gains. A sell off from the highs in the afternoon session curbed the gains. The Nifty finally gained 50.8 points or 0.28% to close at 17,945.95.

* 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.

* Sectorally, the top gainers were the BSE Power, Auto, Metal and Realty indices. The top losers were the BSE IT and Telecom indices.

Nifty: 60 min charts showing consolidation

* Zooming into the 60 minute chart, we can see that the Nifty opened on a positive note and began moving higher after finding support at the 20 period MA.

* Although the index has corrected from the highs, it continues to trade above the 20 and 50 period MA on the 60 min charts and is consolidating in a range.

* This is a healthy sign as a consolidation just below the highs indicates that the market is building strength before an eventual breakout to new life highs.

* We expect this consolidation to happen for a few more sessions before a breakout to the next upside targets of 18100.

Nifty: Daily charts still in uptrend

* On the daily chart, the Nifty continues to hold above a rising trend line that has held the important lows of the last few months. The Nifty has recently made higher bottoms at 17254, 17326 and 17452 and continues to trade above an upward sloping 50 day SMA, which gives further evidence of an intermediate uptrend.

* While the uptrend looks set to continue, we remain open to short term corrections and consolidations. Upside acceleration is likely once the immediate resistance at 18042 is taken out.

Nifty – Daily Timeframe chart

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer