Trade Setup For May 2: Nifty To See Further Weakness In Near Term
Most markets in the Asia-Pacific region were trading lower after the Federal Reserve held rate steady at the current levels.
Market analysis suggests further weakness from the current levels in the near term for Nifty, with the benchmark indices having formed a bearish candle.
The larger texture of the market is still on the positive side. But due to temporary overbought conditions, there can be further weakness in the near future, according to Shrikant Chouhan, head of equity research at Kotak Securities.
The strong hurdle for the Nifty in the short term is at the 22,780–22,800 level, according to Hrishikesh Yedve. As long as the index remains below 22,800, a short-term retracement towards 22,500–22,300 could be possible, assistant vice president, technical and derivatives research at Asit C Mehta Investment Interrmediates Ltd.
For the Bank Nifty, it is advisable to book profits for the short term and wait for fresh triggers as the index has formed a shooting-star candlestick pattern near the upper trend line resistance of rising wedge pattern, Yedve said.
"We view the intermediate profit-taking in the index as a healthy correction and anticipate Nifty to maintain support around the 22,300–22,400 zone," Ajit Mishra, senior vice president of research at Religare Broking Ltd. "Most key sectors, except IT, are participating in the movement, so participants should adjust their positions accordingly."
The US Federal Reserve kept its key interest rate steady for the sixth straight time, citing expanding economic activity and easing but elevated inflation.
The GIFT Nifty was trading 43 points or 0.19% higher at 22,725.00 as of 06:36 a.m.
F&O Cues
The Nifty May futures were down 0.19% to 22,718.3 at a premium of 113.45 points, while its open interest rose 0.37%. The Nifty Bank May futures declined 0.32% to 49,450.55 at a premium of 53.8 points. Its open interest rose 4.66%.
Open interest distribution for the Nifty May series indicates that 22,500 and 22,600 levels are seeing the most put strikes, and call strikes of 22,500 have the maximum open interest.
During the previous session, most open interest was added at the 22,700–22,800 put strikes, and call strikes of 22,500 saw the maximum negative open interest change.
For the Bank Nifty options May expiry series, the maximum call open interest is at 49,500 and the maximum put open interest is at 49,000.
Open Interest Distribution
Open Interest Change
FII/DII Activity
Overseas investors remained net buyers of Indian equities for the second consecutive session on Tuesday.
Foreign portfolio investors mopped up stocks worth Rs 1,071.9 crore and domestic institutional investors stayed net buyers as well and bought equities worth Rs 1,429.1 crore, the NSE data showed.
Stocks To Watch: Kotak Mahindra Bank, Ambuja Cements, Indus Towers, Dabur, Godrej, Jindal Stainless
Markets On Tuesday
Indian benchmark stock indices erased all gains and ended lower on Tuesday as heavyweights HDFC Bank Ltd. and ICICI Bank Ltd. dragged. Decline in metal and information technology stocks also pressured the benchmarks.
The NSE Nifty 50 ended 45.60 points, or 0.20%, lower at 22,597.80, and the S&P BSE Sensex closed 188.50 points down, or 0.25%, at 74,482.78. Intraday, the Nifty rose 0.62% to a record high of 22,783.35 and the Sensex gained 0.59% to 75,111.39.
Broader markets outperformed the benchmarks. The S&P BSE Midcap settled 0.49% up, and the S&P BSE Smallcap ended 0.10% higher.
On the BSE, eight sectors advanced and 12 declined. The S&P BSE Auto was the top gainer, while the S&P BSE Information Technology was the worst performer.
Market breadth was skewed in the favour of sellers as 1,989 stocks declined, 1,832 rose and 129 stocks remained unchanged on the BSE.
Major Stocks In News
Godrej Group: The Godrej family is set to split the 127-year-old conglomerate into two branches. Adi and Nadir Godrej will keep Godrej Industries with its five listed companies, while cousins Jamshyd Godrej and Smita Crishna will receive the unlisted Godrej & Boyce.
Jindal Stainless: The company announced plans to invest Rs 5,400 crore across three major organic and inorganic capacity expansion decisions.
BSE: The company has revised equity derivatives transaction charges from May 13.
Ambuja Cements (Standalone, YoY)
Revenue at Rs 4780.32 crore vs Rs 4256.31 crore, up 12.31%.
EBITDA at Rs 797.79 crore vs Rs 788.26 crore, up 1.2%.
Margin at 16.68% vs 18.51% down 183 bps.
Net profit at Rs 532.29 crore vs Rs 502.4 crore up 5.94%.
Board recommends final dividend of 2/share.
Havells India (Consolidated, YoY)
Revenue up 12% to Rs 5,442 crore (Bloomberg estimate Rs 5,495 crore).
Ebitda rose 20.4% to Rs 635 crore (Bloomberg estimate Rs 570 crore).
Ebitda margin expands 81 basis points to 11.66% (Bloomberg estimate 10.4%).
Net profit up 24.8% at Rs 447 crore (Bloomberg estimate Rs 401 crore).
Board recommends final dividend of Rs 6 per share.
Global Cues
Most markets in the Asia-Pacific region were trading lower on Thursday morning after the Federal Reserve held rate steady at the current levels and signalled a higher-for-longer stance.
The Nikkei was trading 159.86 points or 0.42% lower at 38,114.19, and the Kospi index was 4.62 points or 0.17% down at 2,687.44 as of 06:34 a.m.
The US stock market got hit after the latest batch of economic data showed a plunge in consumer confidence and persistent wage pressures in the run-up to the Federal Reserve decision, reported Bloomberg.
The S&P 500 and Nasdaq 100 fell 0.34% and 0.33%, respectively, as of Wednesday. The Dow Jones Industrial Average was up 0.23%.
Brent crude was trading 0.23% higher at $83.67 a barrel. Gold was higher by 0.22% at $2,324.77 an ounce.
Rupee
The Indian rupee closed stronger against the dollar on Tuesday ahead of the outcome of the US Federal Open Market Committee's meeting the next day.
The local currency closed three paise stronger at Rs 83.44 against the greenback.
