LAST WEEK
NIFTY opened with a huge gap-down at 17,010 as we had closed at an intraday low on Friday and the US markets were rather weak. But the markets did not fall further as Banks lifted the sentiments with strong ICICI Bank results. The index moved up on Tuesday with 17,000 put build-up playing a major role. There was US tech sell-off on Tuesday as corporate results were unsatisfactory. This led to the down-move on Wednesday. Asia was trading higher and there was positivity in the US (futures) with good Meta results on Thursday and we had a trending day. There was a huge sell-off on Friday and NIFTY closed the week at 17,102, down by 69 points or 0.4%.
BANK NIFTY opened with a gap-down at 35,800 and moved higher on Monday. Tuesday saw a gap-up followed by consolidation. Wednesday was volatile with proper support at 35,750 and moved up the following day. Friday saw a sell-off and BNF closed the week at 36,088, up by 43 points or 0.12%.
BNF, FMCG and AUTO exhibited resilience last week.
Foreign Institutional Investors net sold shares worth Rs 11,500 crores last week.
Domestic Institutional Investors net bought shares worth Rs 9,700 crores.
The Friday-fall can be attributed to the following reasons:
Covid was getting out of control in China.
LIC IPO would reduce liquidity in the secondary market.
The week is short with Eid on Tuesday.
SGX NIFTY is at 16,960.
INDIA VIX rose to 19.4.
WEEK AHEAD
NIFTY has supports at 17,000, 16,950 and 16,870. We can expect resistances at 17,200, 17,300 and 17,370.
BANK NIFTY has supports at 35750, 35500 and 35000. Resistances are at 36,400, 36,700, 36,850 and 37,000.
NIFTY has the highest call OI build-up at 18,000 followed by 17,300. The highest put OI build-up is at 17,000 followed by 17,100.
BANK NIFTY has the highest call OI build-up at 37,000 and the largest put OI build-up is at 35,500.
The US Fed Reserve will hold a two-day meeting to decide on the interest rate. The decision will be out on Wednesday. A 50 basis points hike is expected as said by Jerome Powell recently. The markets may not react as they had fallen recently in fear of the same.
Bank of England may come up with another 25 basis point hike this week.
LIC IPO is the elephant in the room. The IPO will be open from 4th May to 9th May. The stock will start trading on 17th May. There is a fear that liquidity in the secondary market would drop. This also might have been a factor in Friday’s fall from high. At the same time, the IPO size has been reduced to 21,000 crore or 3.5% of the market cap which is much less than the expected size.
The negativity in the western markets can be attributed to existing inflation worries and unsatisfactory corporate results. But the earnings in our market were satisfactory. Reliance Industries will announce their results this week. This will have a major impact on the market movement this week.
I will be closely watching 16,880 on the downside and 17,400 on the upside.
Let us know your expectations for the week in the comments section!