Indian equity markets likely to see a day in red today

17 Feb 2023 , 08:52 AM

Indian equity markets are very likely to see a day in red today. US markets closed in the red yesterday. This happened mainly because of Producer Price Inflation data for January being higher than expectations. Producer Price Index (PPI) in January increased year-on-year by 6%. On a month-on-month basis, it increased by 0.7%. A higher PPI increases the fear that US Federal Reserve will use this as a reason for increasing interest rates further. Any further interest rate hikes by US Federal Reserve will hurt both the US economy and the economy of other countries such as India. 

Dow Jones closed, lower by 431.20 points. Nasdaq ended its winning streak of the last 3 days. It fell over 210 points. Bond yields in US spurt to 3.88%. US dollar index closed above 104.

Asian markets have opened in the red today. Japanese ‘Nikkei’ is in the red. After yesterday’s superb rally, weak US cues see profit bookings cross the board in most Asian indices. The undertone remains bullish. US consumer resilience is causing stronger than expected consumption. This in turn is keeping inflation sticky.

Nifty saw another superb start yesterday. This got sold into after 3 days of strong rally. The index closed higher by 20 points, after being up by over 120 points in intra-day trade. Bank Nifty ended lower by 100 points. Banks were the main drag yesterday.  HDFC, Axis and Auto stocks led the losers. IT stocks staged another day of gains.

Technical View: Nifty is likely to find support at around 17800. 18250 is likely to act as resistance. Bank Nifty is likely to find support at around 41100. 42000 is likely to act as resistance on the upside.

Trading call:(1-14 days) : Sell Crompton February future @ 298-303. Stop loss: 307.2.  Target: 294.5

Derivative call-time period: (1 months) Sell Bajaj Finserv February future @ 1420-1430. Stop loss: 1453.15. Target :1395.