Indian equity markets likely to fall further today

16 Dec 2022 , 08:48 AM

Indian equity markets are likely to see another day of decline today. Global cues are strongly negative today. US equity markets saw sharp decline yesterday. Markets reacted negatively to the continued hawkishness of US Federal Reserve with regard to inflation and interest rates. Asian markets have opened in Red today. India’s exports in November increased y-o-y by 0.6% in November. Imports increased y-o-y by 5.4% in the month. Today may turn out to be a good day for buying some stocks at cheaper valuations.

US stocks saw steep fall yesterday. Retail sales data for November implied that the Federal Reserve is driving the economy towards recession, in its quest to control inflation. Bond yields fell to 3.44%. US dollar index rose. European stocks led the downslide.  German “Dax’ index fell over 3%.

Asian markets have opened in the red today.  Japanese ‘Nikkei’ is down by over 350 points in early trade. Taiwanese index and ASX are also in the red.  Technology stocks lead the downslide. Chinese stocks could be relatively insulated today. Reopening is seeing demand rise. This could see Chinese stocks react better to the current economic slowdown.

Nifty saw the much-needed correction yesterday. Pushed by global cues, it saw the biggest fall in over 3 months. Nifty 50 fell nearly 245 points. Profit booking was seen across the board. Banking stocks led the fall. IT stocks, Banking stocks and Reliance’s stock, contributed significantly to the fall.  Consumer durable stocks, select auto stocks and power stocks led the gainers. Market breadth was negative. Mid-caps saw huge profit booking, after the big run up in last week.
 
Technical View: Nifty is likely to find support at around 18300. 18800 is likely to act as resistance. Bank Nifty is likely to find support at around 43000. 43950 is likely to act as resistance on the upside.

Trading call:(1-14 days) : BUY SRF December future @ 2385-2400. Stop loss: 2345. Target: 2460.

Derivative call-time period: (1 months): Buy Tech Mahindra December future @ 1025-1035. Stop loss :1009.5. Target: 1055.