Indian benchmark indices are expected to open in the red on weekly F&O expiry as trends in SGX Nifty indicate a negative opening for the broader domestic index with a loss of 80 points. In the previous session, the BSE Sensex ended nearly 150 pts higher at 59,107, while the NSE Nifty 50 settled 25 pts up at 17,512. According to analysts, Nifty can start to slide as it hovers near its crucial resistance zone. “Nifty seems to be a bit tired after the recent 4-day rise. It now needs to consolidate before embarking on the next upmove. 17608-17349 could be the band for the Nifty in the near term,” said Deepak Jasani, Head of Retail Research, HDFC Securities.
Key things to know before share market opening bell
Global market watch: Shares in the Asia-Pacific traded lower on Thursday as economic fears weighed. Nikkei 225 lost 0.98% and the Topix shed 0.56%. The S&P/ASX 200 in Australia declined 0.83%. South Korea’s Kospi dipped 0.78%. The MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.37%. Wall Street closed lower on Wednesday, marking the end of a multi-session rally, and Treasury yields spiked as gloomy data and downbeat corporate outlooks tossed cold water on investor risk appetite. All three major US stock indexes lost ground, while the benchmark Treasury yield shot up to touch a new 14-year high. The Dow Jones Industrial Average fell 0.33%, the S&P 500 lost 0.67%, and the Nasdaq Composite dropped 0.85%.
Also Read: Share Market LIVE: Nifty, Sensex likely to open in red on weak global cues, Tracxn Technologies listing today
Nifty technical view: Markets ended with modest gains on Wednesday. “Zooming into 15-minute chart, we see that Nifty opened with an upgap, but selling pressure soon emerged from the highs and curbed the gains for the day. The Nifty nevertheless remains in a short-term uptrend as it has moved above the previous swing highs of 17429 and made higher bottoms over the last few weeks. The Nifty is however near strong resistances which coincide with a downward sloping trend line that has held down the highs of 2021 and 2022,” said Subash Gangadharan, Senior Technical & Derivative Analyst, HDFC Securities.
“The index needs to convincingly cross these resistances for the uptrend to continue which could take the Nifty towards the previous intermediate highs of 18096. Crucial supports to watch for resumption of weakness are at 17434. Technically, while the Nifty has moved up further after bouncing back from supports last week, the index is trading near strong resistances and needs to clear them to move higher. Upside momentum will pick up if the Nifty can cross the immediate resistance of 17608. We recommend a stock-specific approach and recommend buying stocks from sectors that are showing relative strength,” he added.
Levels to watch for: “Nifty has been trading within the range of 50 and 61.8 percent of Fibonacci retrenchment; precisely closing above 17610 would be important for the next rally and if 17400 is breached 17260 would be acting as strong support for coming days. OI Data indicates, on the call side the highest OI witnessed at 17800 strike prices while on the put side, the highest OI was at 17400 followed by 17300 strike price. On the other hand, Bank nifty has support at 39800 levels while resistance is placed at 40800. Significant degree of call writing has been seen in the Bank Nifty Index at 41000 level as well,” said Om Mehra, Technical Analyst, Choice Broking.
IPO Watch: Shares of Tracxn Technologies Ltd will debut on stock exchanges today. “Tracxn Technologies Ltd. is expected to have a muted to negative listing owing to high valuations, less than stellar subscription numbers and the nature of the issue being OFS; the current GMP is -3 around 3.75% below its issue price. Due to the rising interest rates globally & recessionary conditions in major markets like North America & Europe the Private Equity Markets, Venture Capital markets, Investment Banks, and Family offices are witnessing a significant cutback in terms of activities and traction; additionally, M&A activities have been subdued,” said Aayush Agrawal, Senior Research Analyst, Swastika Investmart Ltd.
“Thus we believe that the company will find it difficult to substantially grow its client base and top line in the coming years. Finally, the exorbitant valuation of Price to Sales of ~12.5 (Based on FY 22 numbers and Upper band price) and high competition from global players made it very difficult to recommend this issue. Thus we had assigned Avoid Rating for this issue. And investors must wait for a few quarters before deciding whether to invest or not for the long term,” he added.
Q2 results today: ITC, Asian Paints, Axis Bank, Bajaj Finance, Tata Consumer Products, Colgate Palmolive, Aarti Drugs, Canara Bank, Central Bank of India, Clean Science and Technology, Coforge, Dixon Technologies, Happiest Minds Technologies, ICRA, Indian Energy Exchange, ICICI Securities, L&T Finance Holdings, Mphasis, Nazara Technologies, Shriram Transport Finance, Symphony, Tanla Platforms, United Breweries, Union Bank of India, and UTI Asset Management Company will be in focus ahead of September FY23 quarter earnings on 20 October.
Also Read: ITC, IndusInd Bank, HUL, Vodafone Idea, NDTV, Axis Bank, Asian Paints stocks in focus on weekly F&O expiry
FII and DII data: Foreign institutional investors (FIIs) net offloaded shares worth Rs 453.91 crore, whereas domestic institutional investors (DIIs) net bought shares worth Rs 908.42 crore on Wednesday (October 19), according to the provisional data available on the NSE.
Stocks on F&O ban list on NSE: BHEL, Delta Corp, Indiabulls Housing Finance, India Cements, and Zee Entertainment Enterprises are on the five stocks under NSE F&O ban list for 20 October. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95 per cent of the market-wide position limit.