Sensex, Nifty eye third consecutive day of gains; 5 things to know before today’s opening bell

Domestic equity markets have now gained for two consecutive sessions, zooming 2.5% as they look to reverse last week’s losses. S&P BSE Sensex now sits at 50,296 while the Nifty 50 is still shy of the 15,000 mark. On Wednesday morning, SGX Nifty was up in the green, hinting at a gap-up start and continuation of the upward movement of indices. On the technical front, Nifty is on the verge of moving above and filling the opening downside and upside gaps of last week, according to Nagaraj Shetti, Technical Research  Analyst, HDFC Securities, which could propel the index higher.

Global watch: On Wall Street yesterday, tech-heavy NASDAQ was the worst performer, falling 1.69%. S&P 500 and Dow Jones too closed with losses. Asian stock markets were, however, not mirroring that fall. Shanghai Composite was up 0.68%, followed by South Korean equity indices. Japanese markets traded flat to positive while Hang Seng was up 1.15%.

What do the charts say: Current trends indicate bullishness. “The market has formed a continuation formation followed by the formation of the Harami pattern which it had formed on Monday. This indicates bullishness for the market,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities. 

Levels to watch out: Nifty now faces crucial overhead resistance at around 15, 065 and a decisive move above this gap area could open chances of new highs for the market, according to Shetti. On the other hand, 14,830/50,100 and 14,750/49,800 would be major supports for the indices, said Chouhan of Kotak Securities as he advises investors to focus on technology and FMCG stocks.

FII and DII trades: Foreign Institutional Investors (FII) were net buyers of Rs 2,224 crore worth of domestic securities on Tuesday. FIIs were also net buyers of Stock Futures and Options. Domestic Institutional Investors were again sellers, pulling away Rs 854 crore from domestic markets.

IPO watch: MTAR Technologies’ Rs 596 crore initial public offering (IPO) will open for subscription today. The company is selling shares in the price band of Rs 574-575 per share. MTAR is a leading precision engineering solutions company with a presence in the Nuclear, Defence & Space and clean energy sectors. Nirali Shah, Head of Equity Research, Samco Securities has a ‘Subscribe’ rating on the IPO for listing gains only.