Thursday, July 7, 2022

Nifty Short Term Trend Negative; Hariom Pipes Listing, Q4 Results, Key points to know before opening the bell

Indian equity markets are likely to open a gap-down on Wednesday as early trends on SGX Nifty indicate a negative opening for Indian benchmark indices BSE Sensex and NSE Nifty 50. “Today, markets will react to CPI inflation data released in India and US post market hours tomorrow. Also, ECB policy results will have an impact on global markets. Earnings season has started and we see overall good performance from companies. Given the government reforms and strong economic recovery, the long-term trend of the equity market remains positive, though there may be hiccups in between,” said Siddharth Khemka, Head – Retail Research, Motilal Oswal Financial Services.

The Sensex had closed 388 points or 0.66% lower at 58,576 in the previous session, while the Nifty 50 index was down 144 points or 0.82% at 17,530. In the early trade, the markets will first react to the macroeconomic data i.e. IIP and CPI data. Besides, weekly derivatives expiry and earnings volatility of IT major, Infosys will remain high. The benchmark is gradually turning lower and a fall below 17,400 may push Nifty towards 17,250 levels. We reiterate our cautious approach and suggest to focus on those sectors/themes which are showing resilience,” said Ajit Mishra, VP – Research, Religare Broking.

Key things to know before today’s market opening bell

Global Signs: Shares in Asia were mixed in early Wednesday morning trade as investors watched the market’s reaction to the release of a slightly warmer-than-expected US inflation report. In China, the Shanghai Composite slipped 0.7%, while the Shenzhen component was trading 0.91% lower. Hong Kong’s Hang Seng Index fell 0.48%. Japan’s Nikkei 225 rose 1.25%, while the Topix index rose 0.68%. South Korea’s Kospi rose 0.78%. Meanwhile, shares on Wall Street slipped overnight after the release of the US inflation report. The Dow Jones Industrial Average dropped 0.26%, while the S&P 500 dropped 0.34%. The Nasdaq Composite dropped 0.3%.

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Nifty Technical View: “Nifty on Tuesday continued with follow-through weakness amid volatility and closed the day with a fall of 144 points. A proper downside candle was formed on the daily chart with a slight lower shadow. Technically this pattern indicates continuation of weakness in the market. After slipping below the initial support level of 17600 on Monday, the Nifty has now reached the level of the next lower support level of 17500-17450. Though Nifty is placed on support, there is no sign of any solid bottom reversal pattern at lower levels and further weakness can be expected in the short term,” said Nagaraj Shetty, Technical Research Analyst, HDFC Securities .

After showing resilience over the past few sessions, the overall market breadth has turned negative on Tuesday and the broader market indices closed in the red. This is not a good sign and further weakness can be expected. The short term trend of Nifty remains negative. Although Nifty has been placed at the support of 17400 level, but there is a possibility of further weakness in the short term. The market may probably find support around the 17300 level and a bounce off the lows is expected,” said Shetty.

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To monitor Nifty levels: “Nifty continued the downward trend in Tuesday’s session as no confidence in the upside was seen. The index is trading above all its major moving averages and is significantly supported by its 21-day EMA. After today’s close, support is seen at the lower end at 17,400 -17,450 while resistance is at 17,600-17,640. 17400 may continue to act as support, below which Nifty may see a serious correction,” said Harsh Parekh, Technical Analyst, Bonanza Portfolio.

Q4 Results Today: Infosys, Den Networks and Lesha Industries will release their quarterly earnings today (April 13).

Hariom Pipe Listing: Shares of iron and steel products manufacturer Hariom Pipe Industries will hit the stock markets today. Initial Public Offer of Hyderabad-based company, which was subscribed 7.93 times. The portion set aside for retail investors was subscribed 12.15 times, while non-institutional investors and qualified institutional buyers bid 8.87 times and 1.91 times for their allotted quota of shares.

Stocks under F&O restrictions on NSE: RBL Bank is subject to F&O restrictions till April 13. Securities in the embargo period under the F&O segment include those companies in which the security has exceeded 95 percent of the market-wide position limit.

Nation World News Desk
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