Top triggers for Sensex, Nifty when they resume trading on Thursday

Stock Market on Thursday, 22 February 2023: Indian markets have treaded on a falling curve in all three trading sessions this week. When they resume trading on Thursday, they will be impacted by a host of local and global cues. Zee Business has collated a slew of triggers that may have an impact on stock markets when they trade tomorrow.           

Wednesday Market Recap: Indian frontline indices S&P BSE Sensex and NSE Nifty50 witnessed rout on Wednesday marking their third consecutive loss this week. The market breadth was skewed in favour of bears ahead of the monthly expiry on Thursday. While Sensex slipped below 60,000 to settle at 59,744.98, down by 927.74 points or 1.53 per cent while the broader market Nifty50 closed at 17,554.30, lower by 272.40 points or 1.53 per cent. The banking gauge Nifty Bank finished at 39,995.90, down by 677.70 points or 1.67 per cent. All 12 stocks closed in the red, today.

In the 50 stock Nifty50, 2 stocks advanced against 48 declines. The gainers were ITC and Bajaj Auto while the top losers were Adani Enterprises (-11 per cent), Adani Ports (-7.24 per cent), Grasim Industries, Bajaj Finance and JSW Steel.

Triggers that may impcat movement on Wednesday:

1) US Markets: Indian benchmark indices will take direction from movement in US equity markets. Wednesday closing of top three indices on Wall Street - Dow 30, S&P 500 and Nasdaq Composite - is expected to play an important role. At the time of filing the story, Dow 30 was trading at 33,172.20, up by 42.59 points or 0.13 per cent while S&P 500 was trading at 3,999.07, higher by 1.73 points or 0.04 per cent. Nasdaq Composite was trading at 11,507.70, up by 15.35 points or 0.13 per cent.

The domestic indices will also track movement in Dow 30 futures and Singapore-listed SGX Nifty futures, an early indicator of movement in Nifty50, on Thursday. While the former was trading at 33,169.10, up 39.50 points 0.12 per cent around this time, the latter was trading at 17,558.5, higher by 1.5 points or 0.01 per cent.   

 Source: NSE    

2) Rupee Vs Dollar: The rupee depreciated by 10 paise to settle at 82.89 (provisional) against the US dollar on Wednesday, as intense selling pressure in domestic equities and a strong greenback overseas dented the sentiment, PTI reported. However, a sharp decline in crude oil prices in the international market restricted the rupee's fall, forex traders said. At the interbank foreign exchange market, the rupee opened flat at 82.79, and it moved in a tight range of 82.89 to 82.79 during the session. It finally closed at 82.89 against the US dollar, registering a fall of 10 paise over its previous close of 82.79.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.12 per cent higher at 104.23 ahead of the release of the Federal Open Market Committee meeting minutes later in the day.

Bond yields in the US have shot higher this month on anticipation of a firmer action by the Federal Reserve in its efforts to stamp out inflation, this PTI report further said.

Jateen Trivedi, VP Research Analyst at LKP Securities said, "Rupee traded weak below 82.85 amid increasing bond prices in the US which have spiked above November 2022 rates. Keeping the hawkish view on rate hikes the participants keep increasing positions in safer dollars against risky assets. "Rupee weakness can be seen further below if RBI avoids intervention near 83.00."

3) FII / DII Action: Foreign Institutional Investors were net sellers of Indian equities at Rs 579.82 crore while domestic institutional investors were net buyers at Rs 371.56 crore.

4) Stocks in Ban: Securities in Ban for trade on Thursday is Vodafone Idea.

5) Monthly Expiry: Thursday will be a day of monthly expiry and end of February series. Zee Business Managing Editor Anil Singhvi said that the markets are currently oversold and we could see some short covering when markets open tomorrow. 

6) Anil Singhvi Strategy on Nifty, Bank Nifty: Support in Nifty is seen at 17,350-17,450 while resistance is seen at 17,700-17,750. As for Bank Nifty, support is seen at 39,425-39,500 while resistance is seen at 40,000-40,700.

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Expert Take

"The Nifty opened gap down and continued to witness selling pressure throughout the day to close deep in the red down ~272 points for the day. On the daily charts we can observe that the Nifty has closed decisively below the 61.82% fibonacci retracement level (17650) and is currently trading below the 40 week moving average (17594) which is a sign of weakness. The daily momentum indicator has triggered a negative crossover from the equilibrium line which is a sell signal. Thus, both price and momentum indicator is suggesting a further decline in the coming trading session. On the way down we expect Nifty to retest the recent swing low of 17350 which coincides with the 200 day simple moving average and the recent swing low it touched on the day of Budget. On the upside the hourly moving averages and the gap area formed today in the range 17775 - 17820 shall act as a stiff resistance." -- Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas

"The Headline equity index Nifty fell for the fourth consecutive session on Wednesday and the prices which struggled to head higher lost its bullish momentum and slipped below 17,600 levels with a loss of 1.53 percent on the daily chart.

Momentum and trend support levels of the index have broken, suggesting increased volatility in the near term until a new bullish setup matures. India Volatility Index (VIX) has shown a bottom reversal formation and rallied more than 11 percent, closing above 15.50 levels.

The momentum oscillator RSI (14) has found resistance near 55 levels and drifted lower, post that with a bearish crossover. The benchmark index on the daily chart has closed below its 100-day exponential moving average (EMA) and has also broken its upward-rising trend line support.

The index remains in a sell-on-rise mode as of now with immediate resistance placed at 17,800 levels and near-term support placed 17,400 levels." -- Rohan Patil, Technical Analyst, SAMCO Securities

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)