The GIFT Nifty signals a muted start for the Indian markets on the back of weak global cues. Asian markets are under pressure on negative US cues and as US President Donald Trump confirmed proceeding with tariffs from next week. Economic data too has been a point of concern and will weigh on investor sentiment.
The Nifty has been rangebound for past few sessions but can the cracks get deeper this morning? Shrikant Chouhan, Head Equity Research, Kotak Securities explained that, “We are of the view that, as long as the market is trading below 22600/74800 the weak sentiment is likely to persist. Below the same, market could slip till 22400/74200. Further down side may also continue which could drag the market up to 22300/73800. On the other side, if it moves above 22600/74800 the pullback move is likely to continue towards 22700-22750/75000-75200.”
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A recent report by Kotak however claims that the Nifty is likely to rangebound for the rest of the year with chances of a big upside limited. According to Kotak’s Pratik Gupta, the valuations of our markets are still expensive in comparison to many Asian peers and the small and midcaps especially have a significantly long way to go despite the sharp correction seen recently.
Nifty may test 22,400
In terms of the range that is likely to be seen for the day, analysts at Bajaj Broking expect the Nifty to trend lower, the “Nifty on Thursday almost tested the support area of 22,500-22,400 post breakdown below the January low (22786). The daily and weekly oscillators in the Index are placed at an extreme oversold territory. Hence, we expect the index to consolidate in the range of 22,400-23,000 in the coming sessions.”
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Satish Chandra Aluri, Lemonn Markets Desk added that, “Technically, Nifty 50 continues to take support near 22500 and remains a key level to watch on the downside while 22700-22800 is the resistance zone on the upside. Continuous slide lower has brought the RSI below 30 indicating oversold conditions which might lead to a rebound in coming sessions. Bank Nifty ended with gains near 48700 levels with next support around 48500 levels.
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