Indian equity benchmarks hit two-month closing lows on Friday, continuing to fall after a day’s breather, amid weak global cues as investors fretted over worsening inflation and its repercussions on global growth.
Financial, IT, oil & gas and auto shares were the biggest drags on headline indices, with the Nifty50 taking its loss to more than 800 points below its long-term moving average.
What do the charts suggest for Dalal Street now?
The 50-scrip index appears to have taken support at 16,350 before some intraday consolidation, he pointed out. “Normally, the formation of a doji candle after reasonable weakness alerts suggests trend reversal. A confirmation in the form of a sustainable close above 16,500 could open up a bounce in the market,” he added.
Nifty not out of the woods
“We did not expect the fall to extend below 16,500 but when global uncertainty comes, no level is respected. Globally, things have become extremely bleak and it would be very difficult to assess the situation there,” Sameet Chavan, Chief Analyst-Technical and Derivatives at Angel One, told CNBCTV18.com.
“Still, we do not want to get carried away and, hence, would avoid going short aggressively,” said Chavan, who prefers waiting for some reversal in the index this week.
Here are key things to know about the market before the May 9 session:
At 7:34 am on Monday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — were down 203.5 points or 1.2 percent at 16,216.5, suggesting a gap-down opening ahead on Dalal Street.
Global markets
Equities in other Asian markets fell on Monday amid concerns about higher interest rates and a tightening lockdown in Shanghai that stoked fears about global economic growth. MSCI’s broadest index of Asia Pacific shares outside Japan was down 0.6 percent in early hours.
Japan’s Nikkei 225 was down 2.3 percent, Hong Kong’s Hang Seng 3.8 percent, South Korea’s KOSPI 0.9 percent and Singapore’s Straits Times 0.1 percent. China’s Shanghai Composite eked out a gain of 0.3 percent.
S&P 500 futures were down 1.3 percent.
On Friday, Wall Street’s three main indices continued to fall as investors assessed whether the Fed will need to be more aggressive than expected in raising interest rates to tackle inflation. The S&P 500 fell 0.6 percent, the Dow Jones 0.3 percent and the technology stocks-heavy Nasdaq Composite 1.4 percent.
What to expect on Dalal Street
HDFC Securities’ Shetti sees the possibility of a new lower bottom formation below 15,671 levels in the coming weeks. He reiterated that the short-term trend of the index remains negative.
He expects a minor bounce from current levels or from the lows in the coming 1-2 sessions, but warns that the index may find strong resistance around 16,650 to reach its next support at 16,200 in the near term.
Key levels to watch out for
The index continues to struggle below all of its six main simple moving averages:
Period (No. of sessions) | Simple moving average |
| 5 | 16,788.6 |
| 10 | 16,955.3 |
| 20 | 17,206.4 |
| 50 | 17,060.6 |
| 100 | 17,260.7 |
| 200 | 17,244.9 |
Mohit Nigam, Head-PMS at Hem Securities, expects resistance and support at the following levels:
| Index | Support | Resistance |
| Nifty50 | 16,200 | 16,800 |
| Nifty Bank | 34,000 | 35,500 |
FII/DII activity
Foreign institutional investors (FII) net sold Indian shares worth Rs 5,517.1 crore on Friday — the biggest outflow since April 18, according to provisional exchange data. However, domestic institutional investors (DIIs) made net purchases worth Rs 3,014.9 crore.
Call/put open interest
The maximum call open interest is accumulated at the strike prices of 17,000 and 17,400, with 1.2 lakh contracts each, and the maximum put open interest at 16,000, with almost 65,000 contracts, according to exchange data.
This shows immediate support at the 16,000 mark and major resistance at 17,000 followed by 17,400.
Long build-up
Here are five stocks that saw an increase in open interest as well as price:
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| ITC | 8,78,01,600 | 262.25 | 0.54% | 3.92% |
| NTPC | 7,07,37,000 | 159.75 | 0.73% | 2.66% |
| PowerGrid | 4,23,81,351 | 238.95 | 1.75% | 2.66% |
| IOC | 5,39,50,000 | 126.6 | 0.40% | 1.60% |
| Coal India | 76,79,000 | 187.55 | 0.59% | 1.48% |
Long unwinding
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| BHEL | 10,25,74,500 | 51.25 | -5.18% | -2.60% |
| NALCO | 6,78,17,250 | 98.9 | -2.27% | -3.09% |
| M&M Finance | 2,57,96,000 | 176.2 | -1.34% | -3.72% |
| PFC | 3,95,62,200 | 113.2 | -0.35% | -2.31% |
| AB Capital | 1,98,61,600 | 107.45 | -3.50% | -4.49% |
(Decrease in open interest as well as price)
Short covering
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| SBI | 5,50,71,000 | 482.2 | 0.55% | -3.59% |
| IEX | 4,79,85,000 | 201.65 | 0.60% | -2.58% |
| Tech Mahindra | 1,57,81,800 | 1,294.85 | 2.29% | -4.93% |
(Increase in price and decrease in open interest)
Short build-up
| Stock | Current OI | CMP | Price change (%) | OI change (%) |
| Federal Bank | 6,74,30,000 | 92.1 | -2.64% | 11.18% |
| IDFC First | 22,03,01,700 | 38.75 | -1.52% | 2.13% |
| Canara Bank | 4,29,86,700 | 220.2 | -2.09% | 6.90% |
(Decrease in price and increase in open interest)
52-week lows
A total of 33 stocks on the BSE 500 — the broadest index on the bourse — hit 52-week lows:
| 3MINDIA | INDUSTOWER | RBA |
| AAVAS | INFIBEAM | RBLBANK |
| DBL | ITI | ROSSARI |
| FSL | KALPATPOWR | SANOFI |
| GLENMARK | KEC | SPICEJET |
| GRANULES | MANAPPURAM | STAR |
| GSPL | NAUKRI | SUDARSCHEM |
| GULFOILLUB | NIACL | TATACOMM |
| HDFCAMC | PNBHOUSING | WELSPUNIND |
| HINDCOPPER | PRSMJOHNSN | WIPRO |
| INDOSTAR | RALLIS | ZOMATO |
52-week high
No stock on the index hit a 52-week high.
Fear index
The India VIX — known in market parlance as the fear index — jumped 4.7 percent to settle at 21.3 on Friday.
First Published: IST
