Indian equity markets may again see a day of volatility today

20 Mar 2023 , 09:01 AM

Indian equity markets may see a day of volatility today. US markets closed in red on Friday. Most Asian markets have opened in red today. Uncertainty hangs in the air as US Federal Reserve will announce its next interest rate decision on Wednesday.

US markets saw another weak session on Friday. Markets await further action from the Federal Reserve meeting on 22nd March. The consensus is that it will go for a 25-basis point rate hike or even no rate hike at all. Bank stocks dived to new lows of Friday.  SVB crisis saw European banks lead the fall. However, UBS’ proposed buyout of Credit Suisse saw Dow Jones futures recover to trade 200 points higher. Oil prices dived to new 3-year lows. Bond yields hit 3.41%. US dollar index fell to 103.5.

Asian markets have opened in the red today. Japanese ‘NIkkei’ is down by over 130 points in early trade. Most other Asian indices are also in red.  Markets are cautious ahead of the Federal Reserve meeting on Wednesday. South Korean and Taiwan markets are trading almost flat. Chinese stocks may see reaction to strong economic data. Consumption is seeing strong traction there.

Nifty saw a day of gains on Friday. Markets recovered from the worst week in 3 months. IT, Metals and Banks bounced back smartly. Nifty Bank Index closed higher by over 450 points. This was led by HDFC and Kotak. HCL Tech, Hindalco & Ultratech Cement led the gainers on the index. Mid-caps also saw good traction. Advance/decline ratio was in favor of gainers.

Technical View: Nifty is likely to find support at around 16850. 17450 is likely to act as resistance. Bank Nifty is likely to find support at around 38800. 40000 is likely to act as resistance on the upside.

Trading call:(1-14 days) BUY HDFC March future @ 2570-2590. Stop loss : 2526.5. Target: 2630.

Derivative call-time period: (1 months) BUY Tata Power March future @ 204-206. Stop loss: 200.90. Target : 210.