Sensex and Nifty will take a breather today after having started the week on a flat note with negative bias yesterday. Equity, equity derivative segment, Currency Derivatives Segment and Interest Rate Derivatives segment will all remain closed today, on account of Id-Ul-Fitr (Ramzan Id). Currently, S&P BSE Sensex is placed at 56,976, after having slipped 85 points or 0.15% on Monday, while the NSE Nifty 50 closed at 17,069, falling 33 points or 0.21%. Domestic indices have remained in a broad trading range over the last few weeks.
On the charts, the Nifty 50 formed a long bull candle on the daily chart, which indicate a range bound action in the market at the support of 16900 levels, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Nifty has been trading in a broader high low range of 17300-16900 levels and is currently placed at the support of lower range movement,” he added.
Dalal Street has been looking towards global peers for cues in recent trading sessions while some below expectation earnings have forced investors to reconsider the impact of rising input costs, geopolitical crisis, and supply chain worries. “Recently, our markets have been reacting to the global markets direction at the open, but there’s no trended move seen as the index has largely consolidated within the range of 16800-17400,” said Ruchit Jain, Lead Research, 5paisa.com.
Now, Nagaraj Shetti believes that the short term trend of Nifty remains choppy. “Minor upside bounce could be expected in the next 1-2 sessions and the market could eventually turn down and retest the support and lower range. Hence, limited upside and higher possibility of decisive downside breakout persists in the market,” he added. Meanwhile, Ruchit Jain said that Nifty will unfold a directional move only on a breakout beyond 16800-17400 range. “Till then, one should be very stock specific and avoid aggressive trades. Since the mentioned pattern is a bearish pattern and also there’s no broader market strength seen, the bias-ness remains negative,” he added.
Sensex and Nifty will return to trade on Wednesday, May 4, which will also mark the beginning of the LIC IPO. The much-awaited IPO of the insurance behemoth will be the largest public issue on Dalal Street as the government looks to raise Rs 21,000 crore. Analysts do expect the issue will such out liquidity from secondary markets to primary markets.
Investors will also keep an eye on global developments later this week as the US Federal Reserve meets. The Fed is expected to hike interest rates in its upcoming meeting as policymakers in the US attempt to tame inflation which is at a 40-year high in the United States. “The recent hawkish turn by Fed has made investors extra cautious ahead of the upcoming Fed meeting triggering high volatility in the market,” said Vinod Nair, Head of Research at Geojit Financial Services.