02 May , 2022 By : monika singh
Domestic equity markets witnessed heightened volatility the previous week and headline indices closed with losses. S&P BSE Sensex ended at 57,060 while the NSE Nifty 50 closed at 17,102. During the same time frame, the volatility index soared by nearly 6% and currently sits just above 19 levels. Entering Monday’s trade, SGX Nifty was deep in red, suggesting a weak opening for domestic equities. Global cues were also weak with South Asian stock markets mirroring Wall Street’s losses. Chartists believe there could be further weakness in the Nifty 50.
Global Watch: On Wall Street, the NASDAQ index was down 4.17% while the S&P 500 sank 3.63% and the Dow Jones fell 2.77%. Among Asian stock markets, Nikkei 225, TOPIX, KOSPI, and KOSDAQ were also in the red.
Technical take: On the charts, the Nifty formed a long bear candle on the daily chart after a higher opening, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Technically, this pattern indicates a formation of bearish engulfing type candle pattern after a small rise,” he added. Shetti said that while Nifty is placed within a broader range movement, the significance of this pattern could be less.
Levels to watch out for: Nifty has come down from 18115 to 16825 and then consolidated. “In case the Nifty breaches the support end of 16825, then that would lead to a sharp correction in the short term which is usually the impact of the above-mentioned pattern,” said Ruchit Jain, Lead Research, 5paisa.com. He added that on the flipside, 17380-17420 has now become a strong hurdle which needs to be surpassed for any positivity. “Till the index is trading below this resistance end, we advise traders to stay cautious and avoid aggressive positions,” Ruchit Jain advised.
FII and DII trades: On Friday, Foreign Institutional Investors (FII) were net sellers of domestic stocks. FIIs pumped out Rs 3,648 crore from equity markets. Domestic institutional investors (DII) were net buyers of equities. DII bought shares worth Rs 3,490 crore on Friday.
IPO ahead: This week investors will have their eyes fixed on the IPO of Life Insurance Corporation of India (LIC). LIC IPO will open on May 4 as the insurance giant looks to raise Rs 21,000 crore through an offer for sale
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