SGX indicates Nifty to top above 15,800

K. S. Badri Narayanan | Updated on: Jun 16, 2022

Global stocks bounce back on expected rate hike

Indian stock markets are likely to open positive on Thursday, as the US Fed increased the rate on expected line by 0.75 percentage points. As the global stock markets recovered, SGX Nifty is currently ruling 15,820, a gain over 100 points against Nifty futures Wednesday's close of of 15,708.

Global stocks too send positive signals. While equities are up between 0.5 per cent and 1.5 per cent in early deals on Thursday, the US stocks weathered the volatility storm to end on a strong note.

‘Sectoral rotation’

Globally, markets fell by more than 8 per cent over the last five days, factoring in 75bps rate hike due to the record inflation data that came in last week, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd. "There is also lot of sectoral rotation happening with profit booking in energy stocks while beaten down sectors like pharma and banking are witnessing some buying interest."

Market experts said the continuous selling foreign portfolio investors and the weakening rupee are key factors that weigh on investors' mind. Indian rupee fell to a record low of 78.28 and closed at 78.07, a fresh closing low.

Eyes on FPIs movement

So far in June alone, (15 days), FPIs have offloaded nearly ₹25,000 crore worth shares. Their total selling in the last ninth months hit almost ₹2.5 lakh crore. Till date, the monthly FPI net flows is negative in anticipation of a hawkish FOMC meeting. This selling can reverse if current & future policy measures announced are in-line with the market view and vice versa, said Vinod Nair, Head of Research at Geojit Financial Services.

According to Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, "While the market is in an oversold condition, we may see a fresh pullback rally only beyond 15,800 and above the same, the index could move up to 15,950-16,000 levels. On the flip side, as long as the index is trading below 15,800, the correction continuation formation is likely to continue and below the same, the index could slip till 15,550-15,500.”

F&O data suggestion

Derivate data suggests a range bound movement between 15,500 and 16,000.

Choice Broking in a note said, open interest data suggests, on the call side, the highest OI observed at 16,000 followed by 16,100 strike price while on the put side, the highest OI remained at 15,500 strike price. The Nifty may find support around 15,500 levels while on the upside 15,900 may act as an immediate hurdle. On the other hand, Bank nifty has support at 32,500 levels while resistance at 34,200 levels.

Published on June 16, 2022
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