Sensex, Nifty set for weak opening amid mixed global cues

The domestic stock market is likely to open on a negative note on Thursday amid mixed global cues. Gift Nifty at 22,220, compared to Nifty April futures value of 22,331, indicates a gap-down opening.

Most equities across the Asia-Pacific region are down in early deals despite the US stocks ending in the green overnight.

Analysts said the introduction of T+0 settlement for select stocks and the expiry of monthly derivative contracts will keep the market volatile.

They said that today, being the last day of the financial year, analysts expect some buying activity in select stocks.

Ashwin Ramani, Derivatives and Technical Analyst at SAMCO Securities said the India VIX, known as the fear indicator, fell to 12.70 from 12.82 a day earlier, comforting the bulls.

“Heavy put writing (Bulls’ entry) was observed at the 22,000 & 22,100 Strike in Nifty. Call writers (bears) made an exit from the 22,000 Strike, which aided the strong Intraday movement in the Index. The put writers have further strengthened their position at the 22,100 Strike. This level is likely to act as a strong support for Nifty,” he said.

The call writers (Bears) built significant positions at the 46,800 Strike in Bank Nifty. This led to profit booking in the Index. Bank Nifty has made a shooting star candle on the daily chart. This candle pattern is usually considered to be a bearish reversal candle. The option activity at the 47,000 Strike will provide cues about Bank Nifty’s future direction.

Ajit Mishra, SVP - of Technical Research, Religare Broking, said the market showed strength amid mixed cues and gained over half a pe rcent. Meanwhile, a mixed trend continued on the sectoral front wherein energy and auto performed well while IT and FMCG closed in the red. The broader indices also witnessed a similar trend wherein smallcap gained over a per cent while midcap closed flat.

“Nifty has finally surpassed the hurdle of short term moving average i.e. 20 DEMA but we need sustainability above 22,200 to extend the rebound. Also, since the volatility is still high across the board, traders should remain focused on stock selection and risk management,” he cautioned.

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