Indian equity markets may see some profit booking today, after the gains of yesterday

5 May 2023 , 09:01 AM

After the gains of yesterday, Indian equity markets may see a day of profit booking today. Investors are adopting a cautious approach. This has made many of them adopt a short term investment approach for the time being. Another US bank PacWest seems to have come under pressure. It is in talks for a probable sale or raising of fresh capital. European Central Bank continued with its interest rate hawkishness. It raised interest rate by another 25 basis points or 0.25%. It also added that this will not be the last interest rate hike this year.

US markets saw a weak closing yesterday. Investors took in Federal Reserve’s announcement that further increases in interest rates will be determined by data and information that comes. The expectation is now built in that there will be no further interest rate hikes by the US Federal Reserve, this year. Bond yield slipped further. Oil prices hit 6-month lows. US dollar index struggled near 101. Dow Jones fell by over 280 points. Nasdaq closed, down by 58 points. Apple’s March quarter results were better than expectations. It also announced a US$90 billion share buyback.

Asian markets have opened on a mixed note today. Japanese ‘Nikkei’ & South Korean ‘Kospi’ are closed for a holiday today. Most other indices are trading flat to sideways. Weekend blues is causing low turnover. Chinese stocks could see buying. Hang Seng index has a number of buying opportunities, if one goes by technical indicators.

Nifty saw another superb session yesterday after 1-day decline, the previous day. Foreign buying & weekly expiration of derivative contracts saw Bank Nifty lead the gainers with a 370 points rally. Nifty 50 rallied by over 160 points. It crossed the 18200 level with ease. Reliance, HDFC Bank & Adani Twins led the gainers. HDFC Bank, SBI & Federal Bank led the gainers among banks. Profit booking was seen in IndusInd, UPL & Nestle. Mid-caps continued to see outperformance. Nifty Next 50 rose by 0.90%.

Technical View: Nifty is likely to find support at around 18150. 18500 is likely to act as resistance. Bank Nifty is likely to find support at around 43400. 44400 is likely to act as resistance on the upside.

Trading call:(1-14 days): BUY Bharat Forge May future @ 777-780. Stop loss: 762.45. Target :795.

Derivative call-time period: (1 months): BUY Deepak Nitrite May future @1920-30. Stop loss :1886.5. Target: 1965.