Nifty may test key support of 15671 amid LIC listing on Tuesday

MUMBAI:  Stock market investors and traders brace for a tough week ahead with the benchmark Nifty 50 index perched just above a crucial support of 15671.45, the March low following the Russia-Ukraine conflict. The LIC listing on May 17 will be keenly eyed amid the volatility. 

A decisive break below this level could potentially drag the Nifty down another 4% to 15031, said analysts. On the upside the immediate resistance kicks in at 16210, followed by 16484. Overall, with the Nifty smallcap 100 in a bear market and the Nifty 500 below the March low, analysts expect greater chances of a downside rather than the other way. Any bounce would be sold into. 

“The odds of Nifty testing its March low have shortened,” said Rohit Srivastava, founder, IndiaCharts. “Even if the market bounces, it will be a sell-on-rise one.” A higher than expected rise in April consumer prices to 7.79% and a weaker currency, have raised fears of the Monetary Policy Committee raising rates aggressively. 

“In absence of any positive catalysts, indices are expected to remain under pressure as selling emerges on every bounce. Investors are therefore urged to remain on the sidelines since it is preferable to wait out the storm than to go bottom fishing during such turbulent phases,” said Yesha Shah, Head of Equity Research, Samco Securities. 

The Nifty rose from a multi-year low of 7511.1 on March 24, 2020 as the Pandemic surfaced through a record high of 18604.45 on October 19, 2021. From there it has corrected to 15782.15 on May 13, 2022.