Domestic equity markets saw a volatile very first trading session of the week but managed to close the day with gains. At Yesterday’s closing bell, S&P BSE Sensex was up 76 points at 52,551 although the 50-stock NSE Nifty moved 12.5 points larger to finish at 15,811. On Tuesday, cues from international peers have been mixed just after Wall Street indices closed in separate directions. Asian peers as well have been displaying diverse biases through the early hours of trade. SGX Nifty was down in the red. “The further direction of the domestic markets would depend on the monsoon, opening up of the economy in a phased manner and the pace of vaccination going forward,” stated Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.
Global cues: On Wall Street, the tech-heavy NASDAQ ended .74% larger although the S&P 500 was up .18%. However, Dow Jones closed in the red. Among Asian peers, Shanghai Composite, Hang Seng, KOSPI, and KOSDAQ have been in the unfavorable. Japanese markets, Nikkei 225 and TOPIX have been up in the green.
Technical take: On Monday, the Nifty index formed a tiny positive candle at the new highs with a lengthy decrease shadow, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Technically, this market action signals a formation of hanging man type candle pattern. Normally, formation of hanging man after a reasonable upmove or at the highs could act as a top reversal pattern, post-confirmation,” he added.
Levels to watch out for: The Nifty 50 closed above 15,800 just after obtaining slipped as low as 15,606 through the day. Now, if the index sustains above 15,850, then it would not be complicated for the industry to conquer the levels of 16000/16050, stated Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities. “Buying is advisable if the market drops to 15700/15720 levels. The Bank-Nifty has formed a Dragonfly Doji, which is bullish for the sector and for the market,” he stated.
FII and DII trades: Foreign Institutional Investors (FII) have been net sellers of domestic stocks on Monday, pulling out Rs 503 crore. Domestic Institutional Investors (DII) have been net purchasers, pumping in Rs 503 crore.
Inflation be concerned: Inflation reached fresh highs in May as costs continued to soar. Wholesale Price Inflation (WPI) came in at 12.94% in May although the CPI or retail inflation was at a six-month higher of 6.30%. The increasing inflation could pose a danger for stock markets if it remains elevated.