Markets may start the day in Red

1 Jul 2022 , 08:20 AM

Indian equity markets may again start the day today in Red. Markets ended marginally in red yesterday. Today too early profit booking in stocks such as those of banks, that rose yesterday, may begin the day in red for the markets. Oil prices rose in early hours today after the decline of past few days. Core output data of May does not bring any special cheer. The high growth rate seen in the outputs of many sectors is because of the low base effect of output in May last year. Low base effect means that when output in the previous period is low, even a relatively small increase in output in the next period is shown as a higher percentage.

US markets recovered from intra-day big sell off with Dow Jones closing lower by 250 points after being down by nearly 650 points in early trade. Nasdaq closed lower by 1% even as it bounced back from significant lows as 10800 level held strongly as double bottom. Bond yields hit 2-month lows, at less than 3%.  Oil prices slipped by over 3.5%.
 
 Asian markets have opened mixed with the Japanese ‘Nikkei’ trading lower by nearly 70 points as the yen hit a fresh 20 year low against the US$. Most other Asian markets are trading in the green led by the ASX. Chinese stocks could see more gains as government allows visitors, with no quarantine requirement, to allow tourism pick up as a source of revenue.
 
Nifty saw a volatile day as the start met with last hour profit booking with markets focussed on very weak European & US futures. This soured the sentiment with most traders creating short positions on July futures in anticipation of weakness in US markets. Nifty hit a high of 15890 before closing lower by 18 points while Bank Nifty saw short covering to close with gains of over 150 points.
 
Technical View: Nifty likely to find support at around 15600 while 16000 is likely to act as resistance on the upside. Bank Nifty likely to find support at around 33200 while 34000 is likely to act as resistance.
 
TRADING call (1-2 days): BUY Eicher Motor July future at 2785-2805. Stop loss: 2738. Target: 2860
 
 Derivative call- time period:(1 month) BUY GMR INFRA July future at 33.9-34.10. Stop loss: 33.3. Target: 34.75