Will bears drag Nifty below 17500 or is pullback on cards? 5 things to know before opening bell
Indian equity markets are likely to kick off the new week on a negative note amid gloom in Asian markets. SGX Nifty hinted at a negative start for domestic benchmark indices as Nifty futures traded 75.5 points, or 0.43 per cent, lower at 17,668.5 on the Singapore Exchange. Technical analysts expect the market to extend its decline this week. Nifty 50 is likely to touch the 17,600 level. “Overall, the Nifty index has formed a big Red candle which suggests profit booking can continue for upcoming sessions breaching below 17,600 level can show more downside till 17,300 levels,” said Palak Kothari, Senior Technical Analyst, Choice Broking.
Global cues: Major Asian stocks open lower Monday on renewed fears of interest rate hikes following hawkish comments from US Federal Reserve officials and economic concerns. MSCI’s index of Asia-Pacific shares outside Japan was trading 0.66 per cent lower. Japan’s Nikkei tumbled 0.60%, Australia’s ASX 200 shed 0.77%. South Korea’s Kospi dropped 0.79%, China’s Shanghai declined 0.06% and Hong Kong’s Hang Seng fell 1.04%. In the west, US stocks dropped on Friday, snapping four straight weeks of gains, in a broad selloff led by megacaps as US bond yields rose, with the S&P 500 posting losses for the week after four straight weeks of gains.
What do charts say: After showing a sharp upmove in the last few weeks, the Nifty has finally reversed down sharply on Friday and the short term chart pattern signal more weakness ahead. “As per the indications of smaller to larger chart pattern, one may expect Nifty to slide down to 17300 levels (23.6% fibonacci retracement of June bottom to Friday’s high) in the next 1-2 weeks,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Levels to watch out for: The high low bar of Friday has engulfed the previous three candles forming a bearish engulfing pattern. “Hence till Nifty manages to cross the high of Friday (17992), the trend will be bearish or sell on rises. On falls, the first support can come in at 17725. India VIX rose 5.4% on Friday to 18.29 even as the Nifty fell sharply with volumes. This may be due to large protective put buying and square-up of calls sold earlier,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
FII and DII data: Foreign institutional investors (FIIs) bought shares worth Rs 1,110.90 crore, However, DIIs turned net sellers to the tune of Rs 1,633.21 crore, according to the provisional data available on the NSE. FPIs pumped in a net amount of Rs 44,481 crore in Indian equities during August 1-19.
Also Read: Share Market LIVE: SGX Nifty hints at weak start for Sensex, Nifty; UPI remains free, no charges to be levied
Stocks under F&O ban on NSE: Balrampur Chini Mills, Delta Corp, and Tata Chemicals are the three stocks that will be under the NSE F&O ban list for 22 August. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.
