Budget Day! SGX Nifty at 17,500 - Share Market Today

News Shots

Tata Motors reported a consolidated net loss of Rs 1,451.05 crore for the third quarter ended December 31, 2021, dragged down by the impact of semiconductor shortage on its British arm Jaguar Land Rover.

Tata Steel announced winning the bid for acquiring 93.71 per cent stake in Odisha-based Neelachal Ispat Nigam (NINL) for Rs 12,100 crore.

HCL Technologies said it has expanded its partnership with Husqvarna Group with a new multi-year IT services contract.

NTPC said its arm NTPC Vidyut Vyapar Nigam has acquired a five per cent equity stake in Power Exchange of India.

Indian Oil Corporation reported a 19 per cent growth in third-quarter net profit as the rise in refining margins negated the fall in marketing margins.

Earnings today: Adani Ports, Tech Mahindra

What to expect?

NIFTY opened the day with a huge gap-up at 17,308. It was a volatile day ahead of Budget day. 17,290 offered good support and 17,400 acted as a strong resistance yesterday. NIFTY closed the day at 17,340, 238 points or 1.39%.

BANK NIFTY opened with a gap-up at 38,108. The index was in a down-trend but reversal helped the index cross 38,000 once again. The sector failed in giving the much-anticipated breakout and closed the day at 37,975, up 286 points or 0.76%.

All the major sectoral indices closed in the green.

The US markets closed well in the green continuing their recovery. The European markets also moved up yesterday except for FTSE which closed flat.

The Asian markets are mostly trading in the green now with the exception of Shanghai and Hang Seng. The U.S. Futures and the European futures are down after yesterday’s gains.

SGX NIFTY is trading at 17,497 indicating a gap-up opening in NIFTY.

NIFTY has supports at 17,400, 17,340, 17,310, 17,290 and 17,250. We can expect resistances at 17,400, 17,450, 17,500, 17,540 and 17,570.

BANK NIFTY has supports at 37,900, 37,700, 37,500, 37,380, 37,250 and 37,000. Resistances are at 38,000, 38,200, 38,350, 38,500, 38,800 and 39,000.

NIFTY has the highest call OI build-up at 18,000 followed by 17,500.

The highest put OI build-up is at 16,500 followed by 16,700.

The OI creators are cautious in BANK NIFTY ahead of the Budget today. The highest call OI build-up is at 39,000 and the highest put OI Build-up is at 36,000. There is a good straddle build-up at 38,000.

INDIA VIX is at 21.95.

Foreign Institutional Investors net sold shares worth Rs 3,624 crores. Domestic Institutional Investors net bought shares worth Rs 3,649 crores.

All eyes are on Budget today. It is expected that there will be an increase of 14% YoY to nearly Rs 40 Trillion. Tax rates are likely to be unchanged. The government probably will rely on the sale of assets. Priority will be given to employment generation. It is also expected that spending on infrastructure and healthcare will be increased.

The US has prepared a list of elites in the circle of Putin to bring under sanctions in case Russia invades Ukraine. Boris Johnson said that Russia has to retreat to avoid tensions in the region. All these points out the level of conflict in the region which has been affecting the global markets directly or indirectly for the past few days.

There is a high IV in options and we may see an IV crash post the budget move. The option writers are at deeper positions expecting volatility. However, there is a good straddle build-up at 17,300 to make use of the high premium.

Conservative traders can stay away from the market. Aggressive players can wait to see the direction of momentum but make sure that you don’t fall into the trap of volatility. I will be closely watching 38,400 on the upside in BANK NIFTY.