The GIFT Nifty is down by 40 points this morning, hinting at a cautious start for the Indian markets. This dip follows a mix of global uncertainties and subdued domestic sentiment. Tuesday’s trading session saw markets bouncing back from the day’s low, eventually ending flat. But with Q3 earnings season around the corner and fresh worries emerging, traders are gearing up for a volatile day ahead.
Market expert Nagaraj Shetti from HDFC Securities shared that a steady move above the 23,800 mark could trigger an upside rebound in the market. However, if the index slips below 23,496, it might indicate further weakness. These key levels will likely guide traders today.
Why the Gloomy Start?
There are several factors at play. Foreign Institutional Investors (FIIs) have been increasing their short positions. On Monday, their net short stood at ₹2.22 lakh crore, which further increased to ₹2.38 lakh crore by Tuesday. This indicates cautiousness among global investors.
Adding to the mix, U.S. bond yields have been climbing. This has sparked concerns about the Federal Reserve’s rate-cut plans being delayed. For markets already jittery over slowing economic growth, this news hasn’t helped.
Siddhartha Khemka, Head of Research at Motilal Oswal Wealth Management, pointed out that the near-term sentiment will likely remain muted. He believes the ongoing concerns about a new virus strain and expectations around Q3 earnings will keep volatility alive.
What Happened on Tuesday?
On Tuesday, the market opened on a weak note and dropped sharply in the first half. However, it managed to recover by the end of the session. This flat close showed resilience but also reflected the uncertainty among traders. Analysts noted that while the broader sentiment remains cautious, there’s still some hope for sector-specific action, especially with companies starting to release pre-quarterly business updates.
Key Levels to Watch
Today’s trading setup revolves around these critical levels:
- Resistance: 23,800. If the index crosses this, an upward bounce could follow.
- Support: 23,496. Falling below this level might lead to more selling pressure.
Traders are advised to tread carefully. The market’s ability to hold key support zones will be crucial in shaping the direction for the coming days.
Global Cues and Virus Concerns
Globally, markets are still absorbing news about a new virus strain. While its impact isn’t entirely clear yet, the fear of tighter restrictions or economic disruptions is making investors nervous. This adds another layer of complexity to an already fragile market sentiment.
The rise in U.S. bond yields is another global factor keeping equity markets on edge. Higher yields often translate to increased borrowing costs for companies, which can weigh on future growth expectations.
Sector Spotlight
While the overall market may remain choppy, certain sectors could see selective buying. Analysts expect IT, pharma, and select FMCG stocks to draw attention due to their defensive nature. On the other hand, rate-sensitive sectors like real estate and banking might face pressure if bond yields continue climbing.
Final Thoughts
With so many moving parts, today’s session promises to be a challenging one for traders. Keeping an eye on global developments, tracking key levels, and staying updated with Q3 earnings previews will be essential. The market’s next big move will likely depend on how it navigates through these uncertainties. Stay cautious and trade smart!
