The Indian equity market is expected to open on a cautious note amid mixed cues from global peers. The Asian markets traded mostly lower after the release of China’s Inflation data.
Trends on GIFT Nifty indicate a positive start for the broader index. The Gift Nifty was trading around 19,423 level, higher than Nifty’s Friday’s close of 19,332.
On Friday, the Indian benchmark indices ended sharply lower weighed down by profit booking after hitting new highs. The broader markets also witnessed selling, with Nifty midcap 100 and smallcap 100 indices falling over half a percent each.
The Sensex closed with a loss of 505.19 points, or 0.77%, at 65,280.45 while the Nifty fell 165.5 points, or 0.85%, to close at 19,331.80.
“Weak global cues and profit booking in domestic equities dragged key indices down
On the domestic front, markets are witnessing profit booking at a higher level after seeing a run-up of more than 4% in the last eight trading sessions,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.
Going forward, markets will take cues from the corporate earnings for the June quarter and retail Inflation data to be released this week.
Also Read: Gift Nifty flat, Asian markets rise ahead of inflation data; check out key global cues for Indian stock market
“The markets after a big leap in the last few weeks has turned a bit weary of the heights and moved lower by end of the week. The data points emerging from the US giving stronger indications of a likely rate action from the Fed in its next meeting led to a slump in the overseas markets. There is a narrative that is emerging that inflation might be more persistent than it is thought to be at this juncture, going by the conditions that prevail in the US as also Europe, and the consequent rate action will be north-bound. This will have its impact causing some turbulence in the immediate term,” said Joseph Thomas, Head of Research, Emkay Wealth Management.
Technically, a long bear candle was formed on the daily chart with a long upper shadow.
“This pattern indicates rejection of bulls at the new highs. This could also be considered as a short term top reversal pattern. The positive chart pattern like higher tops and bottoms is intact as per daily chart and present weakness in the market could be considered as a higher top reversal of the pattern. Further weakness is expected to find a base for higher bottom formation,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Nifty
“The Nifty experienced a significant decline after failing to maintain its position above 19,500. This drop led to the index falling below the 21 EMA (exponential moving average) on the hourly chart, indicating an increasing bearish sentiment in the market. Furthermore, the hourly RSI has shown a bearish crossover, adding to the negative outlook,” said Rupak De, Senior Technical analyst at LKP Securities.
According to him, the immediate support level is identified at 19,300, while the resistance level remains at 19,500.
Also Read: Day trading guide for today: Six stocks to buy or sell on Monday — July 10
Bank Nifty
The Bank Nifty index experienced selling pressure from the bears, leading to a correction throughout the day on Friday. The index fell 415 points to end at 44,925 on July 7.
“The index formed a bearish candlestick pattern on the daily charts, making lower highs and lower lows. The Bank Nifty index broke below the support level of 45,000, indicating a shift in the trend. However, a follow-up action is required to confirm and sustain the downward momentum. If the index manages to sustain below 45,000 on a closing basis, it is likely to continue its downward momentum towards the levels of 44,500 and 44,200,” said Kunal Shah, Senior Technical & Derivative analyst at LKP Securities.
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