Are Sensex, Nifty entering consolidation phase? 5 things to know before opening bell

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September 28, 2021 8:05 AM

On Tuesday morning, SGX Nifty was trading 30 points higher, hinting at muted market momentum ahead of the opening bell.

Nifty, Stock market

Domestic equity markets started the week with a tug-of-war between bears and bulls and eventually closing with marginal gains. S&P BSE Sensex is currently at 60,077 points while the NSE Nifty 50 is at 17,855. Broader markets closed mixed while Bank Nifty soared 0.90% higher, settling at 38,171. India VIX rallied 6% higher, closing at 18 levels. On Tuesday morning, SGX Nifty was trading 30 points higher, hinting at muted market momentum ahead of the opening bell. Global cues were mixed on Tuesday after Wall Street stock indices closed in opposite directions during the previous trading session. 

Global watch: Dow Jones closed with gains on Monday, gaining 0.21% while S&P 500 fell 0.28% and NASDAQ dropped 0.52%. Among Asian stock markets, Shanghai Composite was up 0.06% while Hang Seng zoomed 0.92%.On the other hand, KOSPI, KOSDAQ, TOPIX, and Nikkei 225 were down with losses. 

Technical take: During Monday volatile trading session, Nifty formed a small negative candle on the daily chart with minor upper and lower shadow, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Technically this pattern indicate a consolidation movement in the market for the last two sessions post sharp upmove of Thursday. This market action signal a lack of sharp selling participation in the market at the new highs,” he added.

Levels to watch out for: Although Nifty’s chart formation indicates temporary weakness, the short-term trend is still positive. “For day traders, the 17900 level could be the immediate hurdle, and below the same, the correction wave could continue up to 17750-17710 levels. On the flip side, if the Nifty moves above 17900, the uptrend continuation formation is likely to continue up to 17950-18000 levels,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities. 

FII and DII trades: Foreign Institutional Investors (FII) were net sellers of domestic stocks on Monday, pulling out Rs 594 crore from equities. FIIs were also net sellers of index options, pulling out Rs 2,072 crore. Domestic Institutional Investors (DII) were net buyers of domestic stocks, pumping in Rs 1,397 crore. 

ICRA revises GDP forecast: Rating agency ICRA has revised its 2021-22 real GDP projection for India to 9% from 8.5% earlier. A ramp-up in COVID-19 vaccination, healthy advance estimates of Kharif (summer) crop and faster government spending were the factors that led to the revision, the rating agency said in a statement. Meanwhile, the Reserve Bank of India expects the economy to grow at 9.5%.

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