Domestic stock markets witnessed a bloodbath on Monday, as benchmark indices tanked over 3% each. S&P BSE Sensex now sits at 47,883 while the Nifty 50 index settled at 14,310. On Tuesday morning, SGX Nifty was up in the green, hinting at a flat to positive opening as markets might look to recoup some of yesterday’s losses. NASDAQ, Dow Jones, and S&P 500 all closed with losses on Monday but Asian markets were not mirroring that trend on Tuesday morning. On the charts, Nifty has reversed its short-term positive trend with yesterday’s fall.
Global watch: On Wall Street, NASDAQ slipped 0.36% on Monday, followed by Dow Jones and S&P 500. During the early hours of trade on Tuesday, Shanghai Composite was trading flat with a negative bias while Hang Seng, Topix, Nikkei 225, KOSPI, and KOSDAQ were all surging higher.
Technical take: Nifty formed a long bear candle on the daily chart with minor lower shadow and the opening downside gap remains unfilled, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “From the upper range near 15200, the market has reached down to the lower range of 14300-14200 levels. Hence, there is a higher possibility of sharp move on either side,” he added.
Levels to watch out for: If Nifty tanks further to give up 14,250, the index may fall to 13,800-13,900, said Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments. He added that if the index has to bottom out it needs to respect 14,250. Meanwhile, Nagaraj Shetti believes that if buying emerges from current levels, Nifty might shoot back up to 14,800-14,900 in the coming weeks.
FII and DII trades: On Monday, Foreign Institutional Investors (FII) were net sellers of domestic securities worth Rs 1,746 crore. FIIs have been sellers for two consecutive sessions now. DIIs, meanwhile, were net buyers of stocks worth Rs 232 crore.
Macro data: IIP data showed that industrial output widened to 3.6% year-on-year in February from 1.6% in the previous month. On the other hand, CPI inflation scaled a four-month peak of 5.52%. “Base effects and surging fuel costs have pushed CPI higher. However, March could mark a local maxima for CPI, with inflation likely moderating in the coming months,” said Rahul Bajoria, Chief India Economist, Barclays.