Domestic markets are expected to open on a flattish note amid mixed global cues. The focus has now shifted to corporate results amidst heavy selling by foreign portfolio investors.
The outlook for the market will be guided by the major domestic and global economic data such as India Nikkei S&P Global Manufacturing PMI (Oct), India Nikkei Services PMI (Oct), India RBI MPC Meeting Minutes, US Initial Jobless Claims, US Manufacturing PMI (Oct), US Services PMI (Oct), US S&P Global Composite PMI (Oct), UK Composite PMI (Oct), said Palka Arora Chopra, Director of Master Capital Services Ltd.
The stock market extended its loosing streak for a third consecutive week with Nifty50 toppling to its weakest level since August; Nifty closed the week 0.50 per cent lower at 24,854 and the Sensex declined around 0.20 per cent to end the week at 81224.75.
The weakness was mainly due to disappointing quarterly earnings by index heavyweights and underwhelming domestic inflation numbers, which again fuelled expectations of a delay in an early rate cut by RBI. Foreign portfolio investors aggressively sold Indian equity, withdrawing a record ₹77,701 crore ($9.25 billion) this month up to October 18. They have been net sellers in all the 13 trading sessions this month.
Nifty futures on Friday closed at 24,949.15, while Gift Nifty is ruling at 24,925 in early morning trade on Monday.
Despite the solid recovery on Friday, the options market continues to reflect cautious sentiment, with call writing (Bear activity) outweighing put writing (Bulls activity), indicating traders’ wariness about further gains. Notable open interest exists at the 25,000 strike calls (53.45 lakh contracts) and the 24,000 puts (43.91 lakh contracts)., said: Dhupesh Dhameja, Technical Analyst, SAMCO Securities. The put-call ratio (PCR) rose to 0.75 from 0.51, reflecting a shift towards a bearish sentiment as call writers maintain dominance. The max pain level at 25,000 remains a critical threshold for future market moves.
Meanwhile, equities across the Asia-Pacific region are mixed, with Japan and Korean markets edging up marginally, while the Hong Kong and Singapore markets are down slightly. Chinese markets are ruling flat despite the rate cut.
Rajesh Bhosale, Equity Technical Analyst, Angel One, said:The next directional trend will likely be confirmed once prices break out of this zone. From a pattern analysis perspective, a break below 24600 would confirm a “Head and Shoulders” pattern, signaling potential weakness, while a breakout above 25250 would confirm a minor double-bottom structure, sparking optimism ahead of the festive week.
“Traders are advised to wait for a clear breakout before making aggressive bets in either direction. In the meantime, it’s recommended to focus on stock-specific opportunities, though caution is necessary, as many individual stocks faced sharp declines despite today’s bullish recovery,” he added..
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