Indian markets could open higher in line with mixed Asian markets today and positive US markets on Monday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
Nifty fell sharply for the second consecutive session on April 25 dragged by losses across the board on fears about the impact of Covid spread in China on the global economy. At close, Nifty was down 1.27% or 218 points at 16953.9.
Nifty fell with another downgap on April 25 and is now close to the previous low of 16824. A move below this level could portend even more weakness for the Nifty (with some intermittent bounces thrown in). 17136-17,171 band could in the near term act as a resistance. The broader market is under pressure as reflected by the Advance decline ratio which is the worst since March 07, 2022, Jasani added.
Prashanth Tapse, Vice President (Research), Mehta Equities Ltd. said, the stock markets are likely to start on an optimistic note on the back of positive trend in US indices and other Asian gauges, as the 10-year US treasury yields slumped to 2.78 percent and WTI Oil prices fell to $96 a barrel. However, Nifty may struggle for direction on any excessive rebound in today’s trade.
The aggressive levels on the upside are placed at 17,199 mark. Nifty’s interweek support is seen only at 16,597 mark and intraday support at 16,807 mark. To regain momentum on the buy side, the benchmark index needs to stay above its 200-DMA at 17199 mark.
Auto stocks could be in the limelight on the backdrop of cooling metal prices, after Nifty Metal index had slumped around 3 percent on Monday as iron ore and steel futures fell hard on backdrop of China lockdown fears.
Mohit Nigam, Head - PMS, Hem Securities, said, Indian markets extended losses to a second straight session on Monday amid across-the-board selling, though gains in heavyweights such as ICICI Bank and the HDFC twins limited the downside. Today, markets are likely to make optimistic start tracking a bounce back in global peers
India and the EU will return to the negotiating table to start serious talks for a free trade agreement (FTA) in June after a gap of nine years. There will be some buzz in the chemical industry stocks as CRISIL Research projects the chemical industry’s revenue to rise 14-17 per cent year-on-year (YoY) in the current fiscal year (FY23), driven by better performance by specialty chemicals, followed by polymers and agrochemicals. Edible oil industry stocks will be in focus with a private report that the top global palm oil producer Indonesia’s plan to halt the export of the commodity from April 28 is heating up edible oil prices in the country.
Campus Activewear IPO (Initial Public Offering) is going to hit primary market today and the public issue worth Rs 1400 crore will remain open for subscription till 28th April 2022. Besides, the country’s largest initial public offering (IPO) of Life Insurance Corporation (LIC) is likely to open on May 4. Investors await more financial results from India Inc for cues, with HDFC Life and Bajaj Finance due to report their numbers later in the day.
On technical front, Nifty50 may take immediate support at 16,750 level and may face resistance at 17,250 level. In case of Bank Nifty, 35,500 and 36,650 levels may act as immediate support and resistance, Nigam added.
On April 25, the Sensex was down 617.26 points or 1.08 percent at 56,579.89. The Nifty was down 218.00 points or 1.27 percent at 16,954.00. About 1008 shares have advanced, 2435 shares declined, and 136 shares are unchanged.
Asian stocks trade mixed
Asian stocks were mixed Tuesday while bonds advanced amid economic threats from China’s COVID outbreak and aggressive Fed monetary-policy tightening.
MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.8 percent, helped by China’s blue chip index adding 0.33 percent, after its worst day in two years on Monday. Hong Kong’s benchmark Hang Seng Index also bounced 0.6 percent. Yet sentiment remained fragile, after Twitter Inc shares rose on news that Elon Musk, the world's richest person, clinked a deal to pay $44 billion cash for the social media platform populated by millions of users and global leaders.
US stocks stage biggest intraday turnaround
Dow industrials staged their biggest intraday turnaround in two months on Monday, while the S&P 500 and Nasdaq Composite each posted their biggest gains in almost a week, as investors shook off early weakness tied to China’s expanded COVID-19 lockdowns.
The yield on the 10-year US Treasury note dived 8 basis points to 2.83 percent after pushing last week to its highest since December 2018. West Texas Intermediate crude for June delivery fell $3.53, or 3.5 percent, to settle at $98.54 a barrel.
Twitter ended up 5.6 percent after announcing it would be bought by Tesla CEO Elon Musk in a deal that will shift control of the social media giant to the world's richest person.
European stocks down to one-month low
European stocks slid to a one-month low and commodity prices dropped on Monday on renewed concerns about rising interest rates and China's sputtering economy.
Elon Musk buys Twitter for $44 bn
Twitter's acceptance of Elon Musk's roughly $44 billion takeover bid brings the billionaire Tesla CEO one step closer to owning the social media platform. The deal is expected to close sometime this year. But before that, shareholders still have to weigh in, as well as regulators in the US and in countries where Twitter does business, before the deal is completed.
The process is off to a good start for Musk, given that Twitter's board has unanimously approved his offer and is recommending shareholders do the same.
LIC IPO to open on May 4
The initial public offering (IPO) of Life Insurance Corporation of India (LIC) is likely to open on May 4, according to news reports citing sources privy to the development.
The government is likely to file the red herring prospectus for the LIC IPO by Wednesday. The issue is expected to close on May 9. The anchor book for the LIC IPO is likely open on May 2.
Bullion outlook
Gold and silver are starting the week with some heavy selling pressure with gold hitting a nearly four-week low and silver a nine-week low. There are mounting concerns regarding demand for raw commodities as COVID cases in China, are spreading rapidly throughout the country. In international gold futures were down $35.90 at $1,898.00 and silver was down $0.729 at $23.53 an ounce.
In domestic market also, gold was down by Rs 831 at Rs 51,438 and silver was down by Rs 1495 at Rs 65051. Gold and Silver extended its fall as the U.S. dollar index is higher and hit a two-year high early today. The yield on the 10-year US Treasury note is presently fetching 2.833 percent.
Although the war between Russia and Ukraine & global inflation continues to worsen, but market participants are now more focused on rising yields in US debt instruments such as bonds and Treasuries, reducing the luster of gold and silver.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd. said, despite of sharp corrections in Gold and silver price, gold holds its key support level of $1880 per troy ounce and silver could also hold $23.00 and will give positive move in coming days as ahead of the marriage season and Akshaya Tritiya falling early next month.
Gold has support at $1885-1872, while resistance at $1912-1922. Silver has support at $23.42-23.20, while resistance is at $24.10-24.32. In INR terms gold has support at Rs51,140–50,920, while resistance is at Rs51,780–52,050. Silver has support at Rs64,620- 64,410 while resistance is at Rs65,690–66,070.
Crude prices decline
On Monday, oil prices have fallen to a two-week low, dipping below $98 on fears of the further demand consequences of a COVID-19 lockdown in China that has sparked bearish sentiments in markets, despite a Russian oil decline and declining U.S. inventories. WTI crude settled at $98.54 per barrel and Brent settled at $102.16 per barrel. Domestic markets were also settled on a weaker note at Rs7,449 per barrel, down by 4.79 percent.
Crude oil extended its fall as the USdollar index is higher and hit a two-year high early today. The yield on the 10-year U.S. Treasury note is presently fetching 2.833 percent. However, the Russia-Ukraine crisis and supply concerns from the OPEC+ are supporting oil prices in the international markets.
Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said, "We expect crude oil prices may show some recovery from yesterday's fall in today’s session. Crude oil is having support at $96.20-$94.40 and resistance is at $100.50–103.00, In INR terms crude oil has support at Rs7,280-7,120; while resistance is at Rs7,640–7,780".
Currency outlook
USDINR 27April futures contract extended its gains and tested its resistance level of 76.7000 again. USDINR rose after hawkish remarks from Fed Chair at the IMF debate raised expectations of higher interest rates in the US. Rahul Kalantri, VP Commodities, Mehta Equities Ltd said, "Looking at the technical set-up, a pair is showing positive momentum on the technical chart and if it continues to sustain above 76.35 could show further strength towards 76.85-77.00; now 76.15 acts as major support for the pair on a daily closing basis".
Results on April 26
Bajaj Finance, HDFC Life Insurance Company, Aditya Birla Sun Life AMC, KPIT Technologies, Macrotech Developers, Mahindra Logistics, Nippon Life India Asset Management, NELCO, Atul, AU Small Finance Bank, Gateway Distriparks, IIFL Securities, Sanofi India, Schaeffler India, Som Distilleries & Breweries, Tata Coffee, Tata Teleservices (Maharashtra), United Breweries, UTI Asset Management Company, VST Industries, D-Link (India), International Travel House, Gujarat Hotels, Jindal Hotels, JK Agri Genetics, and Jumbo Bag are slated to release their quarterly earnings on April 26.
(With inputs from Reuters, Agencies)
