Nifty might take cues from global markets, respite expected for bulls; 5 things to know before opening bell

Equity markets remained under selling pressure on Wednesday with indices ending in red for the fourth consecutive trading session.

Market outlook
Equity markets remained under selling pressure on Wednesday (15 December) with indices ending in red for the fourth consecutive trading session (Image: REUTERS)

Equity markets remained under selling pressure on Wednesday (15 December) with indices ending in red for the fourth consecutive trading session. Ahead of the outcome of the two-day Federal Reserve meeting announced late last night, S&P BSE Sensex fell 329 points or 0.57% to reach 57,788, while NSE nifty 50 erased 103 points or 0.60% to settle at 17,221 yesterday.

“Expect some respite for Bulls if 17,193 is not broken in the first hour, we may see short covering. If we cross 17,375 decisively by today or tomorrow, expect market weakness to be over. Bank Nifty breakout level placed at 37,050 while crucial support is placed at 36,700,” said Rahul Sharma, Director & Head – Research, JM Financial Services Ltd.

Global cues

Wall Street ended sharply higher on Wednesday after the Federal Reserve said it would end its pandemic-era bond purchases in March as it exits from policies enacted at the start of the Covid crisis. Following its two-day policy meeting, the Fed signaled its inflation target has been met. All three main U.S. stock indexes reversed earlier losses and climbed into positive territory. The S&P 500’s sharp rise erased almost all of its losses from earlier this week and left it just short of its record-high close on Friday. The Dow Jones Industrial Average rose 1.08% to end at 35,927.43 points, while the S&P 500 gained 1.63% to 4,709.85.

Asian stocks followed Wall Street higher on Thursday. Japan’s Nikkei climbed 1.67% and touched a three-week intraday high, while Taiwan’s benchmark gained 0.62%. Mainland China shares slipped, with an index of blue chips losing 0.12%. MSCI’s broadest index of Asia-Pacific shares edged up 0.26%.

Technical view

“Technically, we have already seen some correction from the swing high of 17600 and the index is now approaching the support end. For the coming session, initial support will be seen around 17170 which is 61.8% of the recent up move followed by trend line support around 17100-17050 range. If the market manages to show recovery from the mentioned support zones, then we could see short covering which could lead the markets higher. Hence, one should look for some contra bets here as the risk reward would turn favorable for buy trades. The hypothesis will negate if Nifty breaches the 17000 level and hence, it should be referred to as a trend changing level. On the higher side, 17350-17400 would be the immediate range to watch on pullback move”, said Ruchit Jain, Trading Strategist,

Levels to watch out for

The short term trend of Nifty remains negative with volatility. Further decisive weakness from here could open lower levels of 17000-16900 in the short term. Any upside bounce from here could find strong resistance around 17350-17400 levels, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Stocks under F&O ban on NSE

Escorts, Indiabulls Housing Finance and Vodafone Idea are the three stocks under the F&O ban for Thursday (16 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

Supriya Lifescience’s IPO will open for bidding on December 16, and will conclude on December 20. The price band of the offer has been fixed at Rs 265 to Rs 274 per equity share. Bids can be made for a minimum of 54 equity shares and in multiples of 54 equity shares thereafter. The company plans to raise funds aggregating up to Rs 700 crore. The Supriya Lifescience IPO comprises fresh issue of equity shares aggregating up to Rs 200 crore and an offer for sale (OFS) aggregating up to Rs 500 crore by its promoter Satish Waman Wagh.

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