The benchmarks are expected to see a bullish momentum in trade if the session's opening is above the previous close, according to analysts.
The NSE Nifty 50 has seen a sharp correction of almost 1,000 points in the last few trading sessions from the swing high, according to Ruchit Jain, lead research analyst at 5paisa.com. "We had not seen any meaningful pullback and hence, the RSI readings on the lower time frame were in the oversold zone. Also, the 100 DEMA support was placed around 21,800–21,850 and hence, the index witnessed a recovery from this support."
The Nifty index has also formed a bullish-hammer pattern on the daily chart, which is a positive sign if the price action shows positive momentum on Tuesday, Jain said. "Hence, a move above Monday high could lead to positivity in the near term."
The volatility could continue to be high in the near term and traders are advised to look for stock-specific buying opportunities, Jain cautioned.
For the Bank Nifty, the index shows strength by forming a bullish engulfing candle near the trendline support, Hrishikesh Yedve, assistant vice president of technical and derivatives research at Asit Mehta Investment Interrmediates Ltd. "As long as the index remains above 46,983, the bullish momentum will continue."
The GIFT Nifty was trading 30 points or 0.11% higher at 22,243.00 as of 06:55 a.m.
F&O Action
The Nifty May futures were up by 0.38% to 22,201 a premium of 96.95 points, and its open interest was down by 0.7%. Nifty Bank May futures were up by 0.98% to 48,003.7 at a premium of 249 points, while its open interest was down by 3.7%.
Open interest distribution for the Nifty May 16 series indicates that the 21,000 level is seeing the most put strikes, and call strikes of 23,000 have the maximum open interest.
For the Bank Nifty options' May 15 expiry, the maximum call open interest was at 48,000 and the maximum put open interest was at 46,000.
FII/DII Activity
Overseas investors remained net sellers of Indian equities for the eighth consecutive session on Monday.
Foreign portfolio investors offloaded stocks worth Rs 4,498.9 crore. Domestic institutional investors stayed net buyers for 15 straight sessions and mopped up equities worth Rs 3,562.7 crore, the NSE data showed.
Markets On Monday
India's benchmark stock indices recovered from the day's low to end higher for a second consecutive session on Monday, led by gains in HDFC Bank Ltd., ICICI Bank Ltd., and Tata Consultancy Services Ltd.
The NSE Nifty 50 settled 48.85 points, or 0.22%, higher at 22,104.05, and the S&P BSE Sensex gained 111.66 points, or 0.15%, to end at 72,776.13. During the day, the Nifty declined 1.06% to 21,821.05, and the Sensex fell 1.10% to 71,866.01.
The broader markets ended on a mixed note. The S&P BSE MidCap ended 0.36% higher and the SmallCap settled 0.23% lower.
On BSE, seven sectors declined and 13 advanced. S&P BSE Auto was the worst-performing sector, and S&P BSE Services emerged as the top performer.
The market breadth was skewed in favour of sellers as 2,176 stocks declined, 1,780 advanced and 131 remained unchanged on the BSE.
Major Stocks In News
Hero MotoCorp: The company joined the ONDC network to offer parts and accessories to customers on the digital platform.
Vedanta: The company will consider raising funds via the issue of equity shares via FPO, rights issue or other means on May 16. Unit Cairn Oil & Gas's reserves and resources portfolio grew by 19% YoY to 1.4 billion barrels of oil equivalent.
Maruti Suzuki: The company introduced two new variants in Fronx, priced at Rs 8.93 lakh and Rs 9.43 lakh.
Shriram Finance: The board approved the sale of the entire stake in Shriram Housing Finance to Mango Crest & Warburg Pincus. Warburg Pincus to buy a unit for Rs 4,630 crore.
Global Cues
Stocks in the Asia-Pacific region were trading on a mixed note early on Tuesday as market participants await the Federal Reserve Chair Jerome Powell's rate cuts comments. Investors will look forward to the release of the US Producer Price Index print for April, which is expected to show demand for final goods rose 0.3% in the quarter from 0.2% in March, according to a Bloomberg's survey.
The Nikkei 225 was trading 160.05 points or 0.42% higher at 38,339.51, and the Kospi index was 0.46 points or 0.02% lower at 2,726.75. The S&P ASX 200 was 20.00 points or 0.26% down at 7,730.00 as of 06:45 a.m.
The S&P 500 Index fell 0.02%, and the Nasdaq Composite rose 0.29%, as of Monday. The Dow Jones Industrial Average fell by 0.21%.
Brent crude was trading 0.24% higher at $83.60 a barrel. Gold was higher by 0.06% at $2,337.82 an ounce.
Key Levels
US Dollar Index at 105.22
US 10-year bond yield at 4.48%
Brent crude up 0.23% at $83.55 per barrel
Nymex crude up 0.24% at $79.31 per barrel
Bitcoin was down 0.14% at $63,001.75
Rupee Update
The Indian rupee closed weaker on Monday after a key Federal Reserve official indicated that interest rates might stay higher for a longer period.
The local currency depreciated 3 paise to close at Rs 83.52 against the US dollar, according to Bloomberg data.
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