Will Nifty reclaim 18400 or bears to grip D-St- Check US shares, Asian markets, FII activity, SGX Nifty, more

Will Nifty reclaim 18400 or bears to grip D-St? Check US shares, Asian markets, FII activity, SGX Nifty, more

The SGX Nifty signaled that domestic benchmark indices NSE Nifty and BSE Sensex might open on a positive note, as Nifty futures traded 44 points lower at 18,447.50 on the Singaporean exchange. Nifty and Sensex closed Monday’s session higher. Nifty 50 closed at 18,398.85, just shy of the 18,400 level and 60 points down from its intraday high. Sensex closed 317 points higher at 62,346.

“Domestic benchmark indices are marching ahead driven by favourable developments such as declining inflation levels, steady foreign inflows, and in anticipation of robust earnings growth on a QoQ basis next quarter, due to drop in global commodity prices. The domestic CPI inflation came in better than expected at 4.7%, and the WPI inflation decreased by 0.92%, reaffirming RBI’s decision to hold rate hikes,” said Vinod Nair, Head of Research, Geojit Financial Services.

Asian Markets

Asian share markets gained in trade on Tuesday as Hong Kong’s Hang Seng index advanced 0.36%, while China’s Shanghai Composite slipped by 0.38% and the Shenzhen Component declined 0.46%. Japan’s Nikkei 225 jumped 0.73% as South Korea’s Kospi was 0.26% higher. The Taiwan Weighted Index traded 1.1% up.

Crude Oil

Oil prices rose for a second day early on Tuesday, as U.S. plans to purchase oil for the Strategic Petroleum Reserve (SPR) lent support while raging wildfires in Canada fuelled supply worries. Brent crude futures rose 31 cents, or 0.4%, to $75.54 a barrel by 0043 GMT, while U.S. West Texas Intermediate crude was at $71.38 a barrel, up 27 cents, or 0.4%. Both benchmarks rose more than 1% on Monday, reversing a 3-session losing streak.

FII/DII Data

Foreign institutional investors (FII) net bought shares worth net Rs 1,685.29 crore, while domestic institutional investors (DII) net sold shares worth net Rs 191.20 crore on May 15, according to the provisional data available on the NSE.

F&O Ban

The National Stock Exchange has Delta Corp, GNFC, BHEL and Punjab National Bank securities on its F&O ban list for 16 May. According to the NSE, stocks are prohibited in the F&O sector when they have exceeded 95% of the market-wide position limit (MWPL). During the F&O ban period, no new positions are permitted for F&O contracts in that stock.

Bank Nifty Outlook

“The Bank Nifty index reached the previous swing high of 44,151.80 but closed around the 44,000 level. It managed to close just above the psychological level of 44,000, which is a positive indication. The decent addition in the 44,000PE suggests that there is a strong support at 44,000. However, a decisive fall below 44,000 could potentially trigger panic in the banking sector. On the other hand, a decisive move above 44,152 might propel the Bank Nifty towards the 44,500 level. The key support levels to watch out for are 44,000 and 43,700,” said Kunal Shah, Senior Technical & Derivatives Analyst at LKP Securities.

Technical View

“The underlying short term trend of Nifty continues to be positive. The market is still facing hurdles around 18,400 levels and the intraday weakness is emerging from the highs. Any dips could be a buying opportunity around 18,280-18,200 levels. A sharp upside above 18,400 could open further up move towards 18,600-18,800 levels in the near term,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. 

Levels to watch

“The Nifty Index saw large put writing at the 18,400 PE today post the election results which were more or less factored in already. This was coupled by large unwinding of the 18,300 call as well. The Index continues to be in a buy-on-dips strategy with the floor now moving to 18,100 from the 18,000 level. From a risk-to-reward ratio, initiating a buy will not be the best thing to do at this point as 18,500 to 18,600 will be a possible resistance point. One could look to initiate a buy at the 18,200 level from a risk and reward standpoint. The short straddles in the Index have also moved from the 18,300 to the 18,400 level further suggesting that the trend is in place,” said Rahul Ghose, Founder & CEO, Hedged.