Nifty, Sensex correcting for last four weeks as global cues, profit-booking weigh; broader markets resilient By Ajit Mishra We have been witnessing a gradual decline for the last four weeks, in continuation of the prevailing corrective phase. The recent fall in the global indices, especially the US markets, has also started weighing on the sentiment. In line with the benchmark, the continuous underperformance of the banking index combined with profit taking in heavyweights across sectors added to the pressure. However, rotational buying in select index majors in between is capping the pace of decline. And, the broader indices are still showing resilience, offering some comfort to investors. Since we are seeing a mixed trend across sectors, participation should focus on stock-specific approach and maintain positions on both sides. Also, keep trailing stop losses on the rise in the profitable positions, especially in the midcap and smallcap space.Traders should be watchful for Nifty and Bank Nifty highlighted below and align positions accordingly. Nifty has been witnessing profit taking for the last two weeks and hovering around the support of short term moving average i.e. 20 EMA. The recent price action indicates a loss of momentum and we expect the index to consolidate in a broader range. In case of a further dip, the 19,100-19,300 zone would offer support while a rebound towards the 19,650-19,850 zone would attract profit taking again. The banking index, Bank Nifty, has been continuing its underperformance and currently hovering around the crucial support zone of medium term moving average i.e. 100 EMA. We are expecting the 42800-43300 zone to offer a cushion in case the profit taking extends further. On the higher side, the 44500-45000 zone would be tough to cross citing the mixed performance of the private banking majors. Bullish – Axis Bank, Federal Bank, Hindalco, LIC Housing Finance, Maruti Suzuki, NMDC, Tata Consumer Products Bearish – Delta Corp, Indraprastha Gas, Hero MotoCorp, UPL (Ajit Mishra, SVP- Technical Research, Religare Broking. Views expressed are author’s own. Please consult your financial advisor before investing.)
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FII and DII trades: Foreign Institutional Investors (FII) have been net buyers of domestic stocks for successive days now. On Wednesday, FIIs pumped in Rs 2,347 crore. Domestic Institutional Investors (DII) have been net sellers, pulling out Rs 510 crore yesterday.
IPO watch: Syrma SGS Technology enters the final day of bidding today. So far the issue, that opened last week, has been subscribed 2.27 times. Retail investors have subscribed their portion 2.66 times while NIIs have bid for their quota 3.58 times and QIB portion has been bid for 0.71 times.
However, that doesn’t take into account the fact that geopolitical tensions on the Middle East are undeniably rising again which will mean limited downside.”
In the U.S., oil drilling rigs were up by one at 501 last week, Baker Hughes said in its weekly report.JPMorgan forecasted 26 oil rigs to be added this year, most of them in the Permian during the first half of the year.
“The timing of drilling is paramount, as rig additions at the start of the year will contribute to 2H24 production growth,” the bank’s analysts said in a note.
“Despite an impressive 1 mbd of crude and condensate production growth in 2023, we expect 2024 supply to increase by only 400 kbd due to lower completions activity levels vs 2023.”