Indian equity markets are likely to see a day in Red today

19 Jan 2023 , 09:01 AM

Indian equity markets are all set to see a day in Red today. US retail sales fell month-on-month by 1.1% in December, from the previous month. Retail sales have fallen month-on-month in three of the four months between September and December, 2022. Consumption is the biggest driver of US economy. Decline in retail sales indicates to worsening economic situation in the country. A worsening of economic conditions in US will result in worsening of global economic slowdown too. The adverse impact of continued hawkish stand of US Federal Reserve on inflation is clearly visible now.

US markets saw another day of selling pressure, yesterday. Retail sales disappointed, indicating consumption is stalling. Out of turn Federal Reserve members’ comments on 50 basis hike in February also dampened market sentiments. Dow Jones fell 630 points. Nasdaq fell 137 points . Bond yields saw big fall of over 27 basis points to hit 3.37%.

Asian markets have opened in the red, led by the US sell off yesterday. Japanese ‘Nikkei’ is trading lower by 250 points after 2 days of superb rally, gaining over 100 points. Bank of Japan has left rates unchanged. ASX and South Korean markets are trading mildly in the green. Chinese stocks will see action as data suggests that retail spending is showing strong return. This in turn will boost consumption in the economy.
 
Nifty saw another day of gains yesterday.  Index saw strength as selling by foreign investors abated. Mutual fund inflows in metals, financial services and banks led the rally. Hindalco, Tata Steel and L&T led the gainers. Tata Motor, Adani Ent and HDFC Life saw profit booking. Mid- caps also saw gains. Nifty Midcap 50 index ended higher by 0.67%

Technical View: Nifty is likely to find support at around 17850. 18300 is likely to act as resistance. Bank Nifty is likely to find support at around 41800. 42850 is likely to act as resistance on the upside.
 

Trading call:(1-14 days): Sell JSW Steel January future @ 765-769. Stop loss 782.2. Target: 751.5.