Another day in red likely for Indian equity markets

15 Sep 2022 , 08:47 AM

Indian equity markets are likely to see another day in red today. US inflation rate of 8.3% in August has resulted in the likelihood that Federal Reserve may go for a 100 basis point hike in interest rate next week.  Crude oil prices also increased by around 1% yesterday. FPIs were net sellers of around Rs 1670 crore worth of equities in Indian markets yesterday.

US markets saw a flat day yesterday as markets consolidated after the huge sell off from the day before.  Market participants are divided now on the possibility of 100 basis points rate hike by the Federal reserve next week. Bond yields closed near 3.44%. Oil prices rose over 2% . US dollar index closed lower at 109.5.
 
Asian markets have opened muted after the drubbing of yesterday’s sell off.  Japanese ‘Nikkei’ is trading higher by 100 points. Most other indices are trading flat. With mild probability of Federal Reserve increasing rates by 100 basis points, bond markets are seeing action globally. Exit from equities and buying in fixed income are being seen.

Nifty saw another volatile day with the index bucking the global trend. Nifty climbed all walls of worries with the index recovering from morning fall of over 300 points to trade in the green before closing lower by 60 points.  Bank Nifty was the star which recovered from being down by  600 points to close up by 600 points. Large cap banks like IndusInd, Bandhan, SBI and Kotak led the gainers .IT was the ugly spot with losses across the board. Markets went under-weight in IT on renewed weakness in Nasdaq.
 
Technical View: Nifty likely to find support at around 17700. 18200 is likely to act as resistance on the upside. Bank Nifty likely to find support at around 40500. 42000 is likely to act as resistance level.
 
 TRADING call (1-2 days) : BUY JSW Steel September future @ 692-695. Stop loss : 679. Target : 707.
 
 Derivative call- time period:(1 month) BUY IDFC First Bank September future @ 51-51.5. Stop loss: 50.20. Target: 52.5.