Indian markets may start the day on a cautious note

5 Aug 2022 , 08:33 AM

Indian equity markets may start the day today on a cautious note. RBI is all set to announce interest rate hike today.  Further increase in interest rate will slow down the economy but the Central Bank is focussing on controlling inflation. Rupee’s continued decline remains a major concern for Indian equity markets. Oil prices declined further. This is a positive factor for the markets. Some amount of selling is also expected to take place today before the monetary policy decision. 

US markets saw another volatile day yesterday with profit booking being seen in Dow Jones after the stellar rally of the previous day. It closed lower by 85 points. Nasdaq continued to go higher as it entered a new bull market phase, gaining over 20% from June lows. US bond yields traded lower near 2.67% . Oil prices hit 6 month lows with WTI crude hitting US$ 87. 

 Asian markets have opened in the green with the Japanese ‘Nikkei’ trading higher by 100 points .Most other Asian markets are also trading higher. The star for yesterday was the Taiwan market which ignored the geopolitical issues and saw a strong comeback. Chinese stocks will again see action as the fresh tensions could see money come out of China and enter some other Asian markets which offer more stability in earnings.

Nifty saw another volatile day with geopolitical tensions causing a sudden drop of over 220 points even as it scaled new 3 month highs during opening hours. The drop in the mid session was accompanied by strong pullback in the last hour with the index closing flat for the day. Bank Nifty also saw intra-day drop from highs to low of almost 1000 points before closing lower by 234 points. Mid caps again bucked the trend with the Nifty Midcap 100 index closing higher by 0.58%.

Technical View: Nifty likely to find support at around 17160 while 17500 is likely to act as resistance on the upside. Bank Nifty likely to find support at around 37200 while 38200 is likely to act as resistance on the upside.

TRADING call (1-2 days) : BUY IDFC August future at 59-59.5.  Stop loss : 58. Target : 60.25

Derivative call- time period:(1 month) : BUY NTPC August future at 151-152. Stop loss : 148.45.  Target : 154.65