Near term weakness in markets may be coming to an end; Key things to know for today’s trade

Nifty has formed a near doji pattern after a fall, suggesting that the near term weakness in the markets may be coming close to end.

The initial public offer (IPO) of HP Adhesives Ltd., a manufacturer of consumer adhesives and sealants, will open today. (Image: PEXELS)

Indian equity markets extended losses on Tuesday for the third consecutive session as investors and traders await the outcome of the Federal Reserve meeting to be announced today (15 December). The BSE Sensex declined 166.33 points to 58,117, while the Nifty50 slipped to 17,325 and formed a bullish candle on the daily charts. SGX indicated that benchmark indices are likely to open on a subdued note on Wednesday as well. Nifty futures on the Singapore Exchange-traded 6.5 point, or 0.04 per cent, lower at 17,326.50, signalling that Dalal Street was headed for a flat start.

“Nifty has formed a near doji pattern after a fall, suggesting that the near term weakness in the markets may be coming close to end. 17,484 could be the next resistance for the Nifty while 17,226 could be a crucial support below which downmove can accelerate.The market showing consolidation movement on Tuesday, post bearish pattern of Monday could signal chances of sustainable upside bounce back in the coming sessions”, said Deepak Jasani, Head of Retail Research, HDFC Securities.

Mixed global cues

Chinese markets opened muted on Wednesday as investors awaited key Chinese economic data. Mainland Chinese stocks were also subdued, with the Shanghai composite down 0.14% and the Shenzhen component tnear flat. Hong Kong’s Hang Seng index, however, was up 0.42% in early trade. Japan’s Nikkei 225 edged up 0.1%, while the Topix rose 0.65%. South Korea’s Kospi lost 0.18% while in Australia, the S&P/ASX 200 dipped 0.67%.

U.S. stocks fell on Tuesday as some large tech stocks moved lower and new inflation data showed a sharp rise in producer prices. The Nasdaq Composite led the decline, falling 1.14%. The S&P 500 slid 0.75% to close at 4,634.09. The Dow Jones Industrial Average fell 0.30%, to 35,544.18. 

Technical view

Rahul Sharma, JM Financial Services Ltd. said, “If Nifty does not break 17,260 on Wednesday, we may see Nifty heading towards 17,400 soon. On the flip side, if this level breaks, we may see 17,150 being tested post which recovery can come from Friday onwards. Use this dip/volatility to add longs as we expect FII selling to subside in the second half of the month.”

Nifty levels to watch out for

As of now, 17200 – 17100 remains to be a strong support; whereas on the flipside, 17400 – 17500 are to be seen as immediate hurdles. Looking at Tuesday’s close, we expect this consolidation to continue and in such times, one needs to keep focusing on individual stocks that are likely to provide better trading opportunities, said Sameet Chavan Chief Analyst-Technical and Derivatives, Angel One Ltd.

Stocks under F&O ban on NSE

Escorts, Indiabulls Housing Finance, and Vodafone Idea are three stocks under the F&O ban for Wednesday (15 December). Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.

IPO Watch

The initial public offer (IPO) of HP Adhesives Ltd., a manufacturer of consumer adhesives and sealants, will open today (15 December), and will close on Friday (17 December). The price band for the public offer has been set at Rs 262-274 apiece, at a face value Rs 10 each. About 46 lakh shares will be offered in the Rs 126 crore issue. The IPO consists of a fresh offer of 41.4 lakh shares for Rs 113.4 crore and an offer for sale (OFS) of about 457,000 shares by shareholder Anjana Haresh Motwani. Of the net issue, 75% is reserved for qualified institutional buyers, 15%t for non-institutional bidders, and 10% for retail investors.

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