Erratic market seen next week on US inflation data; upcoming Fed meet

Indian market would react erratically next week too on US inflation data and upcoming Fed meeting. The European Central Bank also confirmed July rate hike plans that could raise inflation projections significantly.

This week, Sensex wiped off 1465.79 points or 2.63 percent while Nifty lost 382.50 points or 2.31 percent led by shrinking liquidity due to the Central Bank raising the repo rate by 50 basis points, a weakening rupee, higher oil prices and sustained FIIs selling.

Technically, the Nifty has formed a bearish candle on a weekly chart which suggests downside movement in the counter. Simultaneously in the daily chart Nifty has given closing below 21 SMA and breached its previous support of 16243 which adds weakness in the counter. Indicators such as ATR and ADX remained on the weaker side on the daily chart as well.

However, short-term buying opportunities are anticipated in stocks and sector specific. Coming to the OI Data, on the call side, the highest OI observed at 17000 followed by 16500 strike price while on the put side, the highest OI was at 16000 followed by 15800 strike price.

The Nifty may find support around 16000 followed by 15800 levels while on the upside 16500 may act as an immediate hurdle. On the other hand, Bank Nifty has support at 33200 levels while resistance is placed at 35500 levels.

Overall, the benchmark index looks weak on chart; sell on rise would be advisable in coming days until 16550 level is attained.

Key crucial data for the next week includes India’s CPI, IIP, US Fed interest rate decision and US inflation data.

Top Gainers

ONGC: ONGC share price surges as Brent crude oil prices rose after Saudi Arabia hiked prices for its crude sales in July.

Bajaj Auto/Maruti Suzuki: Auto share price rises on the good number of sales volume in May.

Top losers

Shree Cement: A decline in Shree cement share price occurred after the weak demand in the sector and concern in a partial rollback of the cement prices increase in May.

(Sumeet Bagadia is Executive Director, Choice Broking)

Published on: Saturday, June 11, 2022, 03:55 PM IST