Recovery momentum to continue; SGX Nifty signals 16,100 for Nifty

K. S. Badri Narayanan | Updated on: Jul 07, 2022

 SGX Nifty 50 index futures tracks the National Stock Exchange's main index. File Photo

SGX Nifty 50 index futures tracks the National Stock Exchange's main index. File Photo | Photo Credit: Edgar Su

As inflation worries ease, FII buying returns

Domestic markets are likely to sustain the gains on Thursday, as minutes of US Fed revealed the expected stance of sticking to hiking the interest rates. SGX Nifty at 16,097 indicates a gap up opening of about 100 points, as Nifty futures on Wednesday closed at 15,990. Asian stocks are up in early deal on Thursday.

Fed minutes

As crude and other commodity prices fell sharply, analysts hope global bankers to slow on interest rate hike. The minutes of the Fed’s June meeting said that the possibility of even more restrictive monetary policy to check rising inflation.

Indian market has been gaining strength in the last couple of days on the back of positive FII flows, sharp fall in global commodity prices including crude and strong services PMI data, said analysts.

"Sharp cool off in the oil prices has improved sentiments for oil sensitive sectors like FMCG, Cement, Paint and Auto. Real estate stocks were also in focus on back of strong demand in key markets like Mumbai. Nifty now needs to sustain above 16000 mark to keep the positive momentum. The upcoming results season would provide further direction to the market going ahead," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Ajit Mishra, VP - Research, Religare Broking Ltd, said: "Global indications are still mixed so it’s too early to celebrate the recent rebound. We recommend continuing with a cautious approach and sticking with the themes which are offering comfort even during the downtick. Nifty has the potential to inch towards 16,200, however, the upcoming earnings season would play a critical role in the sustainability of the rebound."

‘Technically bullish’

"We are of the view that the intraday support has shifted to 15900 from 15750. Above 15900, the index could move up to 16100-16200. On the flip side, below 15900, any uptrend would be vulnerable. Quick intraday correction is not ruled out if the index trades below 15900. Below the same, the index could slip till 15800,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd

Kunal Shah-Senior Technical & Derivative Analyst at LKP Securities, said: "The Nifty bulls came back strong from the lower levels and ended the index on a high note. The index surpassed the level of 16,000 and closed above it which shows the continuation on the upside towards 16200 levels. The lower-end support stands at the 15,800 level and as long as this support is held the index remains in a buy mode."

Published on July 07, 2022
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