Defying the benchmark indices, broader markets have continued to show strength and inched higher in the last few trading session.
Sensex and Nifty have slipped for three consecutive sessions now. After Thursday’s fall, BSE Sensex now sits at 51,324 while the 50-stock NSE Nifty is at 15,118 points. However, defying the benchmark indices, broader markets have continued to show strength and inched higher. The consolidation in domestic markets could continue, according to Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services. He added that the weakness in markets could remain till concerns over rising inflation recede. On Friday morning, SGX Nifty was down 45 points, hinting at a gap-down start.
Global watch: On Wall Street, Dow Jones, S&P 500, and the tech-heavy NASDAQ all ended in the red. The fall came after reports claimed that the unemployment rate rose more than expected in the United States. Among Asian countries, Shanghai Composite, Hang Seng, TOPIX, Nikkei 225, KOSPI, and KOSDAQ followed the American peers and moved lower during the early hours of trade.
Technical take: On the charts, the overall market breadth continues to be positive with broader markets moving higher. “This is a positive indication and signal lack of inherent strength in current market declines,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Stock markets are expected to continue their narrow range activity with PSUs and midcaps outperforming, said Shrikant Chouhan, Executive Vice President, Kotak Securities. “Technically, on daily charts index, maintain higher bottom series formation and the texture of the market suggests uptrend likely to continue if the Nifty/ Sensex succeed to trade above 15050/51000,” he added.
Levels to watch out for: Shrikant Chouhan believes that above 15050/51000, stock markets up to 15250, 15330/ 51900, 52300. On the flip side, dismissal of 15060 would result in further weakness and in that case, Nifty/Sensex could retest previous lows of 14970/50840. He believes the focus should be on largecap companies. Meanwhile, Nagaraj Shetti is expecting a bounce back in Nifty from the lows of 15,000. However, he cautions of further weakness if the index falls below 14,950.
FII and DII activity: Foreign Institutional Investors (FII) were net buyers of Rs 903 crore worth domestic securities on Thursday. FIIs were also net buyers of Index option worth Rs 3,568 crore. On the other hand, Domestic Institutional Investors (DII) were net sellers of stocks worth Rs 1,217 crore.