Following the US Fed’s 75 basis point rate hike decision, bears are anticipated to keep dominance over Dalal Street on Thursday on weak global cues. Investors will continue to exercise caution before the RBI off-cycle MPC meeting. Analysts claim that domestic and international events like FOMC, RBI, and MPC meetings will determine the market’s short-term trajectory. “On intraday charts, the Nifty displays a double top formation and a modest bearish candle on daily charts. According to Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, 18000 and 17950 would serve as important support zones for the index while 18200–18250 would serve as the immediate barrier.
Key things to know about market.
Global market watch:
US markets ended the day substantially lower on Wednesday as comments from Fed Chair Jerome Powell dashed early hopes for a Fed policy statement that will boost interest rates by 75 basis points but also hint at possible future rate cuts. The S&P 500 lost 2.50%, the Nasdaq Composite plummeted 3.36%, and the Dow Jones Industrial Average sank 1.55%. Thursday saw a decline in Asian stock prices, mirroring those on Wall Street. Shanghai Composite in mainland China lost 0.11%, while the Hang Seng index in Hong Kong dropped by 2.41%. The Kospi in South Korea dropped 0.66%, and the Japanese stock market was closed on Thursday due to a holiday. The largest MSCI index of Asia-Pacific stocks outside of Japan fell 1.3%.
Nifty technical view:
On Wednesday, Nifty slid into modest weakness amid range movement after displaying remarkable upward momentum in the previous two sessions. It ended the day down by 62 points. On the daily chart, a decent negative candle was formed next to the positive candle from the previous session. Technically speaking, this pattern shows a bearish engulfing shape, but not a traditional one. According to Nagaraj Shetti, Technical Research Analyst at HDFC Securities, this could indicate the introduction of light selling pressure from levels close to 18150–18200.
“Despite a modest dip from the highs, the short-term uptrend status for the Nifty is still positive. Sharp weakening from the 18100–18200 obstacle is absent. According to the daily chart, the bullish chart pattern of higher tops and lower bottoms is still present. Further consolidation or a slight downward correction from here might create the potential for a higher bottom formation near the lows, he concluded.
Levels to watch for:
Technically speaking, the Nifty daily chart shows a bearish candle. Until resistance zone 18180-18200 is crossed on a closing basis, the index may face some profit taking from a short- to medium-term perspective. The downside will have a short-term support area between 17850 and 19000. The Bank Nifty, on the other hand, has a support level at 40500 and a resistance level at 41700. The necessity to keep a hedged position to safeguard themselves in the event of a panic may arise for short-term traders. Additionally, according to Om Mehra, Technical Associate at Choice Broking, investors with a tolerance for sporadic volatility and a time horizon of two to three months may be interested in mid-cap categories’ respectable returns.
Fed hikes rate by 75 bps :
On Wednesday, the Federal Reserve increased its benchmark interest rate by three-quarters of a percent for the fourth consecutive time, but it also gave a signal that it would soon scale back the amount by which it raises rates. With the Fed’s action, the benchmark short-term rate reached its highest level in 15 years, fluctuating between 3.75% and 4%. It was the sixth rate increase this year by the central bank. However, the Fed hinted in a statement that it would soon switch to a slower rate of rate rises. It declared that it will evaluate the overall effects of its significant rate hikes on the economy in the months to come. It observed that it takes time for rate increases to fully impact inflation and growth.
Watch IPO:
On November 3, Dalal Street will witness the debut of two IPOs. On Thursday, Bikaji Foods International will launch its Rs 881 crore initial public offering (IPO). On November 7, the issue will be resolved (Monday). The IPO’s price range is established at Rs 285-300 per share. On November 3, Medanta Operator Global Health Ltd’s Rs 2,206 crore initial public offering (IPO) will also start. The company received Rs 662 crore from anchor investors prior to the IPO. For each equity share with a face value of Rs. 2, Global Health has set a price range of Rs. 319–336.
FII and DII data:
According to preliminary data available on the NSE, foreign institutional investors (FIIs) net purchased shares worth Rs. 1,436.30 crore on November 2 while domestic institutional investors (DIIs) net sold shares worth Rs. 1,378.12 crore.
Stocks under F&O ban on NSE:
Under its F&O ban list for the third of November, the NSE has kept Punjab National Bank and added LIC Housing Finance. Securities from firms where derivative contracts have exceeded the market-wide position limit by 95% are thus prohibited under the F&O segment.
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