Indian equity markets may start the day in red today

12 Dec 2022 , 09:02 AM

Indian equity markets may begin the day in red today. Friday saw net selling by foreign investors. Announcement by Federal Reserve on the next interest rate hike is due this week. Foeign Investors can therefore act in an uncertain way. Oil prices have fallen further. This is a positive development for Indian economy.

US markets saw another weak closing on Friday. Higher than expected Producer Price Inflation saw stocks weaken. Dow Jones closed 300 points lower, with last hour weakness leading to the lower closing. Nasdaq closed lower by 77 after being flat for most of the day. Bond yields hardened to 3.58%. US$ index closed marginally higher at 104.93. Oil prices closed at 14 month low. WTI crude closed at US$71.69.

Asian markets have opened in the red, led by US cues. All eyes are on CPI inflation numbers on Tuesday. Federal Reserve action on policy rates will be announced on Thursday. Most Asian markets will see fall in crude as a big positive. US dollar weakness also is likely to add to positive ETF flows into Asian equities.

Nifty saw a day of selling pressure on Friday. Weak guidance from HCL Tech saw IT stocks lead the decline. Bank Nifty hit new fresh highs in early trade. HCL Tech lowered its guidance to the lower end of the range, indicating that tech budgets in US are under pressure till the situation on interest rates and US dollar stabilizes. This also saw the broader market come under selling pressure. Nifty fell almost 200 points in mid-session. Last hour recovery saw the index close lower by 112 points. Bank Nifty managed to close in the green after seeing intra-day dip of over 300 points.

Technical View: Nifty is likely to find support at around 18350. 18750 will act as resistance. Bank Nifty is likely to find support at around 42800. 44000 is likely to act as resistance on the upside.

TRADING call (1-2 days) : BUY Marico December future at 520-525. Stop loss: 512.10. Target: 535.

Derivative call- time period:(1 month): BUY Hindustan Petroleum December future at 238-242. Stop loss : 235.25. Target; 245.