NSE Nifty 50 encountered resistance at 23,780, influenced by both the falling wedge pattern and the 50-day moving average, according to Aditya Gaggar, director of Progressive Shares.
Aditya Gaggar said that 23,780 will act as immediate support, while on the downside, 23,520 will continue to act as support.
This outlook suggests a “buy on dips” market, with a good chance of breaking the resistance and moving up to 24,000, he said.
Since the market texture is non-directional, Shrikant Chouhan, head of equity research at Kotak Securities, suggested levels-based trading for day traders.
“On the downside, 23,600 and 23,500 would be the key support zones, while 23,800-23,900 could act as crucial resistance areas for traders. However, below 23500 traders may prefer to exit their long positions,” he said.
Bank Nifty faced resistance near its previous breakdown point, resulting in profit booking and forming a spinning top candlestick pattern, according to Hrishikesh Yedve, assistant vice president, technical and derivatives research at Asit C. Mehta Investment Intermediates Ltd.
Mehta said that support for the index is placed near 50,000, while resistance for it is around 50,600. “A breakout in either direction will set up the next move for the index.”
Market Recap
The NSE Nifty 50 and BSE Sensex ended with marginal losses on Wednesday, as ITC Ltd. and Larsen & Toubro Ltd. share prices dragged. The index erased most of its morning gains, as earnings reports did little to lift investor sentiments.
The Nifty 50 ended 42.95 points, or 0.18% down at 23,696.30, and the Sensex ended 312.53 points, or 0.40% down at 78,271.28.
FII/DII Activity
Foreign portfolio investors turned net sellers of Indian equities on Wednesday after a session of buying on Wednesday as they sold stocks worth approximately Rs 1,682.8 crore.
Domestic institutional investors turned net buyers after a selling session as they mopped up equities worth Rs 996.3 crore, according to provisional data from the National Stock Exchange.
F&O Cues
The Nifty February futures were down 0.12% to 23,757 at a premium of 60.7 points, with the open interest down by 0.5%.
The open interest distribution for the Nifty 50 Feb. 6 expiry series indicated most activity at 24,000 call strikes, with the 23,000 put strikes having maximum open interest.
Stocks To Watch
Azad Engineering: The company entered into a long-term pact with Rolls- Royce for aircraft engine parts.
Welspun Corp: The company approved the sale of 19% stake in Welassure to Rakshak Securitas. It also approved investment of up to Rs 250 crore in arm Welspun Specialty Solutions.
UltraTech Cement: The company commissioned an additional 0.6 MTPA grinding capacity at existing unit in Sonar Bangla, West Bengal. Additional capacity to service cement demand in East India region.
ICICI Prudential Life Insurance Co.: The company gets International Financial Services Centres Authority approval to set up life insurance operations in GIFT City.
Global Cues
Asian stocks advanced on Thursday tracking second consecutive day of gains on Wall Street amid the looming US-China trade war and muted technology earnings.
Japan's Nikkei was up 260 points, or 0.68% at 39,097 while South Korea's Kospi rose 0.26%, or 11 points to 2,520 as of 6:30 a.m. Future contracts in China and Hong Kong hint at a positive start for the benchmarks.
Stocks in China ended Wednesday's session lower after the stock market opened for trade after a long holiday amid rising trade tensions with the US. The South Asian country imposed retaliatory tariffs almost immediately after US tariffs came into force. China will also investigate Google for alleged antitrust violations.
The dollar index reversed its gains when Trump's tariff news against Canada and Mexico hit the market. The dollar index — which tracks the greenback's performance against a basket of 10 leading global currencies — was 0.09% up at 107.67.
Stocks on Wall Street extended their gains for the second day while the 10-year yield dropped nine basis points to 4.42%. The S&P 500 and the tech-heavy Nasdaq Composite rose 0.39% and 0.19%, respectively. The Dow Jones Industrial Average advanced 0.71%.
Ahead of Friday’s US jobs report, employment at companies picked up in January by more than forecast. In Asia, trade balance figures for Australia, and Vietnam and Thailand's inflation will be the key data points on Thursday.
Gold prices were steady after hitting a record high Wednesday while crude oil prices fell to trade near the lowest this year. The Brent crude was down 2.09% at $74.61 a barrel as of 6:50 a.m. IST.
Money Market Update
The rupee ends 38 paise lower at a record closing low of 87.46 against the US dollar due to FII exits that have added to the US-China trade tension. It closed at 87.08 on Tuesday.
The Indian rupee hit a fresh record low after opening weaker today as global funds continued to sell the currency amid global tensions.
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