Sensex, Nifty may mirror global cues on opening; 5 things to know before today’s trade

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October 26, 2021 7:57 AM

Entering the second trading session of the day, SGX NIfty was in the green, hinting at positive momentum building up ahead of the day’s trade.

Global cues were positive on Tuesday morning. (Image: REUTERS)

Domestic equity markets witnessed another volatile session on Monday with headline indices, this time, closing with gains. S&P BSE Sensex closed at 60,967 points while the NSE Nifty 50 settled at 18,125. Broader markets failed to mirror the up-move as smallcap and midcap indices ended in the red. Bank Nifty zoomed more than 2%. Entering the second trading session of the day, SGX NIfty was in the green, hinting at positive momentum building up ahead of the day’s trade. Global cues were largely positive during the early hours of trade after Wall Street closed with gains and most Asian markets followed suit. 

Global watch: On Wall Street, the NASDAQ index zoomed 0.90% while S&P 500 gained 0.47% and Dow Jones moved up 0.18%. The Shanghai Composite, Nikkei 225, TOPIX, KOSPI, and KOSDAQ were all in the green on Tuesday morning. Hang Seng traded flat. 

Technical take: Nifty scaled higher on Monday, forming a small negative candle with a lower shadow on the daily chart, besides the similar candle of Friday, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Technically, this pattern indicates a range bound action with minor upside recovery from the lows. This is not a convincing attempt by bulls to make a comeback,” he added. 

Levels to watch out: Chartists believe the short-term structure is still weak. “We are of the view that the short term structure is weak but a quick pullback rally is not ruled out if the index succeeds to trade 18000-18050 levels. Once again, 18050 could act as a sacrosanct support level for the day traders, and above the same, we can expect an extension of a pullback rally up to 18250-18310. On the flip side, below 18050 or below 20 days SMA, the uptrend would be vulnerable,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

FII and DII trades: Foreign Institutional Investors (FII) have been net sellers of domestic stocks for 5 consecutive days now. FIIs sold Rs 2,459 crore worth of equities on Monday. Domestic Institutional Investors, however, were net buyers of stocks worth Rs 2,390 crore. 

IPO Watch: While the Initial Public Offering (IPO) of Nykaa will open later this week, the market regulator has approved more offerings that could soon hit Dalal Street. An update from SEBI said that the regulator has approved public offerings of as many as seven companies, including fintech giant Paytm, ESAF Small Finance Bank, Sapphire Foods India and Anand Rathi Wealth. PB Fintech, which operates an online insurance platform Policybazaar and credit comparison portal Paisabazaar has also received the green light.

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