Nifty downtrend to continue or bulls to stage a comeback? 7 things to know before share market opens

Indian benchmark indices are likely to open lower amid weak global cues, hinted SGX Nifty as Nifty futures traded 63 pts lower at 18,746 level on the Singapore Exchange. In the previous session, the BSE Sensex fell 34 points to 62,835, while the NSE Nifty 50 gained 5 pts to settle at 18,701. “We expect the market to consolidate for the next few days given the RBI policy on Wednesday and Gujarat election outcome on Thursday. Today, we might see some reaction based on Gujarat exit poll data,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

Key things to know before share market opening bell

Global market watch: US markets ended Monday lower, as investors spooked by better-than-expected data from the services sector re-evaluated whether the Federal Reserve could hike interest rates for longer. The Dow Jones Industrial Average fell 1.4%, the S&P 500 lost 1.79%, and the Nasdaq Composite dropped 1.93%. Meanwhile, shares in the Asia-Pacific fell today, tracking Wall Street losses. Japan’s Nikkei 225 shed 0.23% and the Topix lost 0.24%. South Korea’s Kospi dropped around 1%. The MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.45%.

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Nifty technical view: A small negative candle was formed on the daily chart with a long lower shadow. “Technically, this market action signals a formation of a bullish hammer-type candle pattern. Normally, such candle pattern after a reasonable decline calls for caution for short positions and more often results in upside bounces from the lows. Nifty sustained on a immediate support of 10-day EMA and also a trend line support as per the concept of change in polarity as per daily chart. The minor downward correction in Nifty is about complete and the market is set to show upside bounce from the lows in the short term,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Levels to watch for: “According to the volume profile, 18650 may act as robust support while on the upside, 18850 may act as an immediate hurdle. On the other hand, Bank nifty has support at 42900 levels while resistance is placed at 43500. We would advise being cautious and frequently booking profit,” said Ameya Ranadive, Equity Research Analyst, Choice Broking.

Call, Put OI data: OI data indicates, on the call side the highest OI was witnessed at 18800 followed by 19000 strike price while on the put side, the highest OI was witnessed at 18600 strike price. Nifty Put Call Ratio stands at 0.90. Bank Nifty OI data indicates, on the call side the highest OI was witnessed at 43500 while on the put side, the highest OI was witnessed at 43000 strike price.

FII and DII data: Foreign institutional investors (FIIs) net offloaded shares worth Rs 1,139.07 crore, while domestic institutional investors (DIIs) net purchased shares worth Rs 2,607.98 crore on 5 December, according to the provisional data available on the NSE.

Stocks under F&O ban on NSE: The National Stock Exchange has GNFC, Delta Corp and Indiabulls Housing Finance under its F&O ban list for 6 December. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95% of the market-wide position limit.

Also Read: Share Market LIVE: Nifty, Sensex stare at negative start amid weak global markets; RBI MPC meet eyed for cues

Oil falls: Crude oil prices fell over 3% on Monday, following US stock markets lower, after US service sector data raised worries that the Federal Reserve could continue its aggressive policy tightening path. Brent crude futures settled down $2.89, or 3.4%%, at $82.68 a barrel. West Texas Intermediate crude (WTI) fell $3.05, or 3.8%, to $76.93 a barrel.


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