SGX Nifty traded in the red, indicating a lower start for the domestic Indian equity markets at 17,589, down 36 points. On Wednesday, markets extended their gaining streak, as Nifty rose 0.91% to 17,557, while Sensex added 582 points to settle at 59,689. “The domestic market is displaying resilience, unaffected by the weaker global peers, thanks to strong banks and NBFCs quarterly numbers and the windfall tax cut. Additionally, the recent US data revealed a softening in the labor market and declining factory orders, increasing the likelihood of a pause in rate hikes by the Federal Reserve. The RBI is expected to announce a 25-basis point rate hike in its policy announcement on Thursday before taking a pause, positive for the market,” said Vinod Nair, Head of Research, Geojit Financial Services.
Key things to know before share market opens
Wall Street Overnight
U.S. stocks lost ground on Wednesday and Treasury yields extended their decline as a batch of data fueled worries that restrictive central bank policies could push the global economy into recession. The Dow Jones Industrial Average rose 0.24%, the S&P 500 lost 0.25% and the Nasdaq Composite dropped 1.07%.
Crude Oil
Oil prices eased in early Asian trade on Thursday after weak U.S. job openings data signalled cooling economic conditions which may hit demand. West Texas Intermediate U.S. crude was down 14 cents to $80.47 a barrel at 2241 GMT. On Wednesday, Brent crude futures settled up 5 cents, or 0.1%, at $84.99 a barrel.
FII/DII Data
Foreign institutional investors (FII) net bought shares worth Rs 806.82 crore, while domestic institutional investors (DII) net sold equities worth Rs 947.21 crore on 5 April, according to the provisional data available on the NSE.
F&O Ban
The National Stock Exchange has no securities on its F&O ban list for 6 April. According to the NSE, stocks are prohibited in the F&O sector when they have exceeded 95% of the market-wide position limit (MWPL). During the F&O ban period, no new positions are permitted for F&O contracts in that stock.
Technical View
“The present sharp upside bounce is likely to negate the bearish chart pattern of lower tops and bottoms on the daily chart (confirmation on the move above 17800). The overall chart pattern is getting stronger as per smaller and longer term charts like daily and weekly. The short term trend of Nifty continues to be positive and we expect this upside momentum to continue in the coming sessions. The near term upside targets for the Nifty is around 17800 and next 18250 levels for the next one week. Immediate support is placed at 17400 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Bank Nifty View
“The Bank Nifty index ahead of the RBI policy continued its strong momentum and ended on a high note. The index next hurdle on the upside stands at the 41,500-41,600 zone which can act as a profit-booking zone for the short term. The index, however, surpassing those levels on a closing basis, can extend the rally towards 42,000/42,500 levels. The lower-end support is visible at the 40,600-40,500 zone, which will cushion the bulls,” said Rupak De, Senior Technical Analyst, LKP Securities.
Volumes to Watch
“On the call side, the highest OI observed at 17700 followed by 17800 strike prices while on the put side, the highest OI was at 17500 strike price. On the other hand, Bank nifty has support at 40500 while resistance is placed at 41500-41650 range. We suggest traders to hedge their trading position as markets can be volatile. A cautiously positive approach is advised for the coming days,” said Om Mehra, Equity Research Analyst, Choice Broking.
RBI MPC Meet
The RBI MPC meeting will conclude on Thursday, following which, the RBI Governor Shaktikanta Das will announce if there is a change in the regulatory body’s stance as well as the repo rate. Experts are predicting a 25 bps hike as a result of sustained inflation, El Nino-related disruptions and the global banking crisis.