Nifty short-term trend positive, 17900 crucial support; key things to know before share market opening bell

Benchmark indices NSE Nifty 50 and BSE Sensex are expected to see a muted start as trends in the SGX Nifty hinted at a flat to negative opening for the Indian share market. Nifty futures traded marginally in red at around 18,092 levels on the Singaporean exchange. “Markets are taking a breather after the recent surge and it’s healthy for the overall trend. However, the recent uptick in volatility on the global front especially in the US may trigger erratic swings in between. Participants shouldn’t worry much about short-term fluctuation and maintain their focus on utilising the intermediate consolidation phase to gradually accumulate fundamentally sound stocks,” said Ajit Mishra, VP – Research, Religare Broking.

Things to know before share market opens

Global market watch: Hong Kong stocks rose in a mixed Asia-Pacific session as markets continued to process the U.S. Federal Reserve’s 75 basis point interest rate hike. Hong Kong’s Hang Seng Index rose 2.08%. In mainland China, the Shenzhen Component inched up 0.892%. Japan’s Nikkei 225′s fell 2%, and South Korea’s Kospi was flat. Overnight in US, stocks fell for 4th consecutive session. The Dow Jones Industrial Average slid 0.46%, S&P 500 lost, and Nasdaq Composite shed 1.73%.

Nifty technical view: A small positive candle was formed on the daily chart with minor upper shadow. “Technically, this pattern indicates a ‘buy on dips’ opportunity in the market at the highs. Though Nifty placed at the crucial overhead resistance of 18200 levels, the significant reversal pattern or any sharp weakness is missing at the highs. This could be a display of resilience of the market near the overhead resistance. The positive sequence like minor degree higher tops and bottoms continued in the market and Nifty is currently in an attempt of forming higher bottom at the lows. We expect the choppy movement to continue in the next 1 or 2 sessions before showing upside bounce from the lows,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Levels to watch for: “Nifty on a weekly basis is still positive and will not lose momentum until it breaks 17900 as it was seen as a very crucial resistance for last year. Nifty would be seen in the range of 18120 to 17900. Bank Nifty is moving in the positive upward channel for the past 1 month but now has hit a congestion zone and is not able to break 41550 on Upside. Bank Nifty is relatively weak as it is making lower lows but has the same supply zone of 41550-41600. On a weekly basis, Bank Nifty is taking support around 40830 levels, which is also a confluence level, unless and until 41500 is taken out there will be supply in bank Nifty. Key support and resistance for Bank Nifty are 40860 and 41500. We would suggest buying on dips until key support is taken out in Nifty and Bank Nifty,” said Palak Kothari, Senior Technical Analyst, Choice Broking.

FII and DII data: Foreign institutional investors (FIIs) remained net buyers of Indian shares for a fifth straight session on Wednesday as they bought shares worth Rs 677.62 crore, whereas domestic institutional investors (DIIs) offloaded equities worth Rs 732.11 crore on 3 November, according to the provisional exchange data.

Stocks under F&O ban on NSE: LIC Housing Finance and Punjab National Bank are the two stocks under the NSE F&O ban list for 4 November. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95% of the market-wide position limit.

Also Read: HDFC, Britannia, Titan, Adani Enterprises, TVS Motor, Vodafone Idea, Yes Bank, Escorts stocks in focus

IPO Watch: The initial public offering of Fusion Micro Finance will conclude today. The IPO has witnessed muted response from investors so far as the offer has garnered bids for 61.46 lakh shares against IPO size of 2.13 crore shares, subscribing just 29% on 3 November, the second day of bidding. Retail investors have bought 31% shares of the allotted quota, while non-institutional investors (NIIs) have put in bids for 61% shares of the portion set aside for them. Qualified institutional buyers (QIBs) have subscribed for 26,960 shares against the reserved portion of 59.56 lakh shares.