The Indian benchmark indices, on the back of a considerable bearish cue from the Asian markets, began the session with significant gap-down. Although there has been a recovery post opening, the Nifty 50 at 17,950 and the Sensex at 60,140 are down by nearly 0.7 per cent each for the day so far.
Major Asian indices like Nikkei 225, ASX 200, Hang Seng and KOSPI are down in the range of 1.5 – 2.7 per cent.
The market breadth of the Nifty 50 index remains negative as the advance-decline ratio is at 20-30. All the mid- and small-cap indices too are in the red, losing between 0.3 and 0.6 per cent. But notably, they have outperformed the benchmark indices today until now.
However, it is not all that negative when we look at the sectors as a handful of them have gained today. The Nifty Media and the Nifty Bank are the top gainers, up by 0.9 and 0.3 per cent, respectively. On the other hand, the Nifty IT, down by nearly 3.5 per cent, is the biggest loser. This is followed by the Nifty Realty, down by 1.3 per cent.
Futures: The September futures of the Nifty 50 began the session much lower at 17,826 compared to yesterday’s close of 18,105. Even though it rallied post opening to the current level 17,950, it is still at a loss for the day. It can be a considerable challenge for the bulls to cross over the 18,000-mark. Similarly, on the downside, 17,800 can offer a good support for the contract.
Therefore, wait for the Nifty futures to breach either 17,800 or 18,000 to get hold of the next leg of trend. We suggest staying on the fence for now and consider initiating fresh trades along the direction of break of the 17,800 – 18,000 range.
Strategy: Stay on the fence for now. Go long with a stop-loss at 17,925 if the contract breaches 18,000 for a target of 18,150. But if the contract falls below 17,800, initiate fresh shorts with stop-loss at 17,900 for a target of 17,600.