Ahead of Union Budget 2022 presentation on Tuesday, Indian equity markets were staring at a gap-up open amid positive global cues. Early trends on SGX hinted at a positive start for BSE Sensex and NSE Nifty 50. The Nifty futures were trading with a gain of 160 points on the Singaporean Exchange. “The market will closely watch the developments during the budget session and react accordingly. Nifty has managed to hold above its key level of 17,000 mark for last few days. Markets are likely to remain volatile today and 17,000 would be a key level to continue the bullishness. Some of the sectors that would remain in focus ahead of the Budget are Capital Goods, Infra, housing, Real Estate, PSU Banks, etc,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Key things to know before market opening bell
Global cues: Markets in Asia rose on Tuesday, tracking stocks on Wall Street as they surged for a second session. Japan’s Nikkei 225 jumped 1.13% in early trading, while the Topix was up nearly 1%. Markets in mainland China, Hong Kong and South Korea are closed on Tuesday for a holiday. Meanwhile, over on Wall Street, stocks surged for a second day yesterday to wrap up a rough January. The S&P 500 rose 1.89% while the Dow Jones Industrial Average ended 1.2% higher. Tech heavy Nasdaq Composite rose 3.41%.
Nifty technical view: A small positive candle was formed on the daily chart with gap up opening and with minor upper shadow. Technically, this pattern indicate a strengthening of upside momentum, post formation of a swing low of 16836 on 25th Jan 22. Hence, that swing low could now be considered as a short term bottom reversal for the market. This is positive indication and one may expect further upside for the short term. The formation of upper shadows of the last two sessions indicate a presence of key resistance around 17350- 17400 levels, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
After sustaining above the important uptrend line support as per daily and weekly chart around 16800-16900 levels recently, the upside movement in the market was expected as per its recent past movement. If the market fails to sustain the upside momentum in the short term, then one may expect Nifty to retest the lower support. Key economic event of Union Budget is on 1st of Feb and this event is expected to bring high volatility in the market. There is a possibility of 1-2% swing movements in Nifty on either side, as happened in the past during this event, he added.
Key support, resistance levels for Nifty: FY23 GDP forecast at 8-8.5% ahead Union Budget by Finance Minister Nirmala Sitharaman enthused Indian markets. Nifty rose smartly on January 31 but ended up making a doji like pattern after a rise and made a triple top on an intra day basis. Advance decline ratio remains positive. The high of 17410 needs to be breached in which case 17485 is the next resistance while 17208 could act as a support. However, based on Budget pronouncements, the band of Nifty could widen, said Deepak Jasani, Head of Retail Research, HDFC Securities.
Nifty Call, PUT OI: Maximum Call open interest was seen at 18000 strike with 20.05 lakh contracts. This is followed by 18500 strike (13.81 lakh contracts), and 17500 strike (12.54 lakh contracts). Maximum Put open interest of 37.92 lakh contracts was seen at 16500 strike, followed by 17000 strike (24.53 lakh contracts), and 16000 strike (21.66 lakh contracts).
FII and DII data: Foreign institutional investors (FIIs) offloaded sold shares worth Rs 3,624.48 crore, while domestic institutional investors (DIIs) bought shares worth Rs 3,648.65 crore in the Indian equity market on Monday (31 January), according to the provisional data available on the NSE.
Q3 Results today: Tech Mahindra, Adani Ports and Special Economic Zone, Cholamandalam Investment and Finance Company, Elecon Engineering, Gujarat Ambuja Exports, IFB Industries, Indian Hotels, Indoco Remedies, Jubilant Ingrevia, Kansai Nerolac Paints, Laxmi Organic Industries, Mangalore Chemicals & Fertilizers, Procter & Gamble Hygiene & Health Care, Poonawalla Fincorp, Sona BLW Precision Forgings, Triveni Turbine, TTK Prestige, and VIP Industries will release quarterly earnings on Tuesday.
Stocks under F&O ban on NSE: Since it is the beginning of February series, there is no stock under F&O ban for February 1. If the open interest of any stock crosses 95% of the MWPL (market-wide positions limits), all F&O contracts of that stock enter a ban period on the National Stock Exchange
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