Nifty to trade range-bound or top 19400- See GIFT Nifty, FII data, F&O ban, crude, more before market opens

Nifty to trade range-bound or top 19400? See GIFT Nifty, FII data, F&O ban, crude, more before market opens

GIFT Nifty was 0.06% lower during Monday’s early trading session at 19,318.5, indicating a flat opening for domestic indices NSE Nifty 50 and BSE Sensex. On Friday, domestic benchmarks NSE Nifty 50 and BSE Sensex ended in negative territory. The Sensex closed down by 0.31% at 64,948.66, while the Nifty 50 shed 55 points to finish at 19,310.15.

“Concerns regarding inflation and shifts in investor preferences towards safer assets dampened overall market sentiment for domestic equities. Fears of a Fed rate hike, coupled with a decline in global equities, exerted additional downward pressure, specifically on IT stocks. Higher US bond yields and default risk in China are poised to prompt FIIs to adopt a more prudent stance when considering investments in emerging markets,” said Vinod Nair, Head of Research at Geojit Financial Services.

Asian Markets

Shares in the Asia-Pacific region were trading mixed on Monday. China’s Shanghai Composite and Shenzhen Component were lower by 0.41% and by 0.23% respectively. Japan’s Nikkei 225 traded with gains of 0.28%. South Korea’s Kospi declined 0.59% while Hong Kong’s Hang Seng fell 0.88%. The Taiwan Weighted index recorded a gain of 0.07%.

Crude Oil

Oil prices were steady on Monday with Brent staying above $80 a barrel, as investors balanced tightening supply driven by OPEC+ cuts with nagging concerns about global demand growth amid high interest rates.

FII/DII Data

Foreign institutional investors (FII) sold shares worth net Rs 266.98 crore, while domestic institutional investors (DII) bought shares worth net Rs 339.18 crore on 18 August, according to the provisional data available on the NSE.

F&O Ban

The National Stock Exchange has PNB, India Cements, Hindustan Copper, GNFC, SAIL, Chambal Fertilisers, Delta Corp, Granules India, ZEEL, and Indiabulls Housing Finance securities on its F&O ban list for 21 August. According to the NSE, stocks are prohibited in the F&O sector when they have exceeded 95% of the market-wide position limit (MWPL). During the F&O ban period, no new positions are permitted for F&O contracts in that stock.

Bank Nifty Outlook

“Bank Nifty has continued with its losing streak and closed in the negative for the seventh consecutive trading session. It has reached the 20-week moving average (43,800) and hence the fall may not be severe from current levels. The trend is still negative however, oversold and we can observe divergence on the hourly charts however it needs to be confirmed by the price. Until the Bank Nifty trades below 44,000, we can expect the weakness to continue. On the downside, it can slip towards 43,500,” said Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas.

Technical View

“The short term trend of Nifty continues to be weak with range bound action. There is a possibility of downside breakout of the immediate support of 19,250 levels and the Nifty could slide down to another base area of 19,100-19,000 levels in the near term. Any upside bounce could find resistance around 19,400 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.