Indian equity markets may see some selling pressure today

3 May 2023 , 09:04 AM

Indian equity markets may see some selling pressure today. Many market participants will sell off their positions today, a day before US Federal Reserve’s next interest rate policy announcement.

US markets saw much needed correction yesterday, before the Federal Reserve meeting on interest rates announcement today. Markets are divided on the stance going forward. 25 basis points hike has been factored in prevailing bond yields. Regional banking crisis could see some ‘dovish’ language on the part of Federal Reserve.  3 banks have already buckled down because of its interest rate hawkishness. Oil prices hit 4-month lows. Yields closed lower by 7 basis points  to 3.43%. 

Asian markets have opened weakly today. This is in line with the US market sell off yesterday.  Investors await Federal Reserve interest rate announcement, that will come tomorrow. US dollar weakness will cause more ETF flows into Asian equities. South Korean & Taiwan markets are trading in red. ASX index is also in red. Chinese stocks are also expected to open weak. American Depository Receipts (ADRs) of many Chinese stocks, trading in the US, closed in red yesterday.

Nifty saw another day of gains yesterday. Foreign investors were on a buying spree. Large caps led the rally. Metals, IT & Insurance stocks led the gainers. Profit booking was seen in FMCG & Pharma stocks. Nifty Mid-cap 50 index was the star among indices. It closed with gains of over 1.12%.

Technical View: Nifty is likely to find support at around 17850. 18350 is likely to act as resistance. Bank Nifty is likely to find support at around 43000. 43900 is likely to act as resistance on the upside.
 

Trading call:(1-14 days) : SELL Bank of Baroda May future @ 187.5-189. Stop loss: 192.2. Target: 184.

Derivative call-time period: (1 months): BUY HCL TECH May future @ 1070-1075. Stop loss: 1050.55. Target :1095.