Domestic markets continued to move southward on Wednesday with headline indices correcting nearly 1% each. S&P BSE Sensex fell 566 points or 0.94% to close at 59,610 points while the NSE Nifty 50 shed 149 points and ended at 17,807. Bank Nifty was down more than 1% while India VIX gained. Entering the weekly Futures & Options expiry session, SGX Nifty was down in red, suggesting a weak start to the day’s trade. Global cues were largely negative after minutes of the US Fed’s March meeting showed that the central bankers were willing to take a more aggressive approach to tame inflation.
Global watch: On Wall Street, the NASDAQ index closed 2.22% lower, followed by S&P 500, and Dow Jones. Among Asian markets, Shanghai Composite, and Hang Seng were up in the green while Topix, Nikkei 225, KOSPI, and KOSDAQ were down in the red.
Technical take: With the Nifty 50 falling for two consecutive sessions, the index has formed a small negative candle on the daily chart with a minor upper shadow, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “This pattern confirms a short term top reversal at the swing high of 18114 levels and the beginning of downward correction in the market,” he added. On the other hand, Rupak De, Senior Technical Analyst at LKP Securities expects an immediate recovery. “Going forward, immediate recovery from the current level is expected. However, failure to hold above the lower band of the rising channel may trigger selling pressure in the market,” he said.
Levels to watch out for: Rupak De said support for Nifty is visible at 17750, below which the index may drift down towards 17450 over the short term. Nagaraj Shetti said that there is a possibility of further weakness in the market down to 17600 levels in the next few sessions. “Confirmation of bearish Island Reversal could open more downside for the market,” Shetti added.
FII and DII trades: After six days of constant buying, Foreign Institutional Investors (FII) turned net sellers once again on Wednesday. FIIs pulled out Rs 2,279 crore from D-Street. Domestic Institutional Investors (DII), however, continued to pump in money, buying stocks worth Rs 622 crore.
Call and Put OI: For the April Futures & Options series, maximum call open interest (OI) is placed at 18000 strike, followed by 1900 strike. Meanwhile, Put OI is the most at 17500 strike, accompanied by 17000 strike.
