Trade Setup For April 3: Short-Term Uptrend Remains Intact

GIFT Nifty, an early indicator of the Nifty 50 index's performance in India, was trading 47.5 points, or 0.21%, lower at 22,452 as of 7:35 a.m.

<div class="paragraphs"><p> (Source: Pixabay)</p></div>
(Source: Pixabay)

The risk-reward is unattractive for leveraged long positions due to skittish global cues and higher crude. The highest open interest in Nifty exists in the 22,000–23,000 range, showing some risk at the start of the series.

Cement stocks could extend their optimism with a strong long buildup, and pharma and metals are also likely to outperform on fundamental news flow.

Soni Patnaik, assistant vice president at JM Financial Services Ltd., predicts some profit booking for selected F&O stocks due to selling in stock futures with foreign investors' outlook hedged for indices.

Nifty April futures witnessed 1.6% additions of open interest along with a slight decrease in its PCR, currently at 1, indicating a sideways trend, Patnaik said.

Ahead of its weekly expiry, the Nifty 22,300 put-call ratio stands strongly above 3.6, indicating the dominance of put writers, Patnaik said. "Resistance continues around 22,500/22,550 for the Nifty, with a fresh rally likely only above this resistance."

There are no negative signs as of now, as the short-term uptrend remains intact, according to Ruchit Jain, lead researcher at "Traders are advised to trade with a positive bias and look for stock-specific buying opportunities."

GIFT Nifty, an early indicator of the Nifty 50 index's performance in India, was trading 47.5 points, or 0.21%, lower at 22,452 as of 7:35 a.m.

FII And DII Activity

Overseas investors remained net sellers of Indian equities on Tuesday for the second consecutive day.

Foreign portfolio investors offloaded stocks worth Rs 1,622.7 crore and domestic institutional investors remained net buyers and mopped up equities worth Rs 1,952.7 crore, data from NSE showed.

Trade Setup For April 3: Short-Term Uptrend Remains Intact

Markets On Tuesday

India's benchmark stock indices snapped their three-day rally to close marginally lower on Tuesday on likely profit booking after indices hit a fresh record high in the previous session.

Information technology stocks came under pressure as hope of an earlier rate cut by the Fed waned following the release of economic data in the US. Mid- and small-cap banks led outperformance in the broader indices.

The NSE Nifty 50 ended 8.70 points, or 0.04%, lower at 22,453.30, while the S&P BSE Sensex fell 110.64 points, or 0.15%, to close at 73,903.91.

Boarder markets outperformed benchmark indices, with the S&P BSE Midcap closing with 1.14% gains and the S&P BSE Smallcap ending 1.28% higher on Tuesday.

On BSE, 16 sectors advanced and four declined. S&P BSE Consumer Durable rose the most at 1.82%. S&P BSE TECK was the worst performer

Trade Setup For April 3: Short-Term Uptrend Remains Intact

Major Stocks In News

  • UltraTech Cement: The company will invest Rs 32,400 crore towards ongoing capex over the next three years. It has commissioned two new units in Chhattisgarh and Tamil Nadu to surpass 150 MTPA capacity.

  • Bharti Airtel: The company approved the allotment of 1.38 crore shares to foreign currency convertible bondholders at a conversion price of Rs 518 per share.

  • HCLTech: The company’s arm completed the divestment of a 49% stake in the joint venture with US-based State Street. The arm received proceeds worth $172.5 million for stake divestment, termination of services, and settlement of contractual commitments.

  • JSW Energy: The board approved a fundraising of up to Rs 5,000 crore via QIP at a floor price of Rs 510.09 per share.

Top Brokerage Call

Emkay Global Financial Services On Nestle

  • Emkay Global Financial Services initiates coverage on Nestle to 'reduce' with target price of Rs 2,650 apiece.

  • Current capex cycle to address company's segment demand more affectively

  • Penetration-led volume growth is helping it outperform sector volume growth

  • Strong pricing power is added advantage and a likely factor for faster margin recoup

  • Sees stock re-rating restrained by pressure on ROE/ROCE ahead

  • Any consumption slowdown in the formal sector would be a downside risk

  • Capability of utilizing enhanced capacity and driving innovation would be an upside risk

Motilal Oswal Financial Services On Prestige Estates

  • Motilal Oswal Financial Services reiterates 'buy' on Prestige Estates, with a target price of Rs 1,535 apiece.

  • Expansion in new markets to sustain pre-sales growth momentum.

  • Rental portfolio: Mumbai assets shaping up well.

  • To start generating positive free cash flow from FY26.

  • Platform deal with Abu Dhabi Investment Authority and Kotak AIF can further release cash flow burden.

  • Monetising hospitality portfolio can lead to value unlocking.

Global Cues

Stocks in the Asia-Pacific region tanked during early trade as investor sentiments worsened following a tsunami warning issued in Japan and Taiwan.

The KOSPI was trading 1.39% lower at 2,715, and the S&P ASX 200 was trading 1.26% lower at 7,788.5 as of 6:53 a.m. A Tsunami warning was issued for Taiwan and Japan's Okinawa after an earthquake of 7.4 magnitude hit Taiwan, according to Bloomberg.

Traders sent U.S. stocks sliding during overnight trade on speculation that major central banks would keep interest rates higher for longer than expected given the solid economic data sets. The S&P 500 index and the Dow Jones Industrial Average fell 0.72% and 1%, respectively, as of Tuesday. The Nasdaq Composite ended 0.95% lower.

Brent crude was trading 0.17% higher at $89.07 a barrel. Gold was lower by 0.08% at $2,278.75 an ounce.

Rupee Update

The Indian rupee closed little changed on Tuesday even as the US dollar index surged to an over four-month high. The local currency appreciated two paise to close at Rs 83.38 against the greenback.

Trade Setup For April 3: Short-Term Uptrend Remains Intact