On Friday, the 30-share BSE Sensex dropped 732.96 points or 0.98 per cent to settle at 73,878.15 after soaring 484.07 points. From its intra-day high of 75,095.18, the benchmark tanked 1,627.45 points to the day’s low of 73,467.73.
BankNifty index faced selling pressure from higher levels but maintained its uptrend, closing near the immediate support of 49,000.
This week, India’s HSBC Services PMI, HSBC composite PMI, FII investments and quarterly results of major companies along with the Jobless claims data in the US are major events that will keep the markets buzzing.
V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services says: “In the two days of trading in May, FPIs have invested Rs 1,156 crore in equity and sold Rs 1,726 crore in debt (Source: NSDL). The rising VIX is indicative of potential volatility. Market can turn highly volatile in the short-run.”
On Friday, the 30-share BSE Sensex dropped 732.96 points or 0.98 per cent to settle at 73,878.15 after soaring 484.07 points. From its intra-day high of 75,095.18, the benchmark tanked 1,627.45 points to the day’s low of 73,467.73. The NSE Nifty also declined 172.35 points or 0.76 per cent to 22,475.85. The benchmark hit a record 22,794.70 in the early trade, up 146.5 points or 0.64 per cent.
Vijayakumar said Fed’s decision indicates rate cuts much lower-than-expected earlier this year. Inflation has turned stubborn at lower levels. But the latest jobs data in the US indicates a slowing economy and, therefore, rate cuts may be necessitated.
The wage increase falling below 4% also reflects a weakening labour market. From the stock market’s perspective this is good news. That’s why the US markets rallied sharply on Friday.
“The market is at record highs. There has been a pre-election rally. It is not as strong as in the past. More than anything else, FPIs will respond to changes in the US bond yields. If the US bond yields fall and the Indian economy and markets do well they will turn aggressive buyers,” Vijayakumar commented.
Major results: In the ongoing result season, traders will be eyeing earnings of prominent companies, which include Godrej Consumer Products, Lupin, Dr Reddy’s Laboratories, JSW Energy, Pidilite Industries, SRF, Voltas, Hero Motocorp, Larsen and Toubro, Piramal Enterprises, Tata Power Company, TVS Motor Company, Asian Paints, Bharat Petroleum Corporation, Escorts Kubota, Hindustan Petroleum Corporation, State Bank of India, Cipla, Tata Motors, Union Bank of India etc.
Economic data: On the economy front, investors would be watching the data of HSBC Composite PMI Final, HSBC Services PMI Final, which scheduled to be released on May 06, India’s Industrial output and Manufacturing production going to be out on May 10. Industrial output in India rose by 5.7% on an annual basis in February of 2024, missing market expectations of a 6% expansion, but still pointing to the sharpest increase since October 2023.
US market data: On the global front, investors would be eyeing few economic data from Redbook, Fed Kashkari Speech on May 7 followed by Initial Jobless Claims on May 9, Michigan Consumer Sentiment Prel, Fed Goolsbee Speech, Baker Hughes Oil Rig Count on May 10.
Technical Outlook for Nifty: Deepak Jasani, Head of Retail Research at HDFC Securities said: “In a volatile session, Nifty ended lower on May 3 amid selling across sectors except metals. At close, Nifty was down 0.76% or 172.4 points at 22475.9. Broad market indices fell less than the Nifty even as the advance decline ratio fell to 0.52:1.
Jasani further said that Nifty formed a bearish engulfing pattern on daily charts on May 3, engulfing the previous two candles. Nifty sold off after forming a new high in the morning and showed a feeble recovery late in the day. “On weekly charts, Nifty ended 0.25% higher. It formed a bearish Gravestone Doji like pattern on weekly charts. Nifty could now head towards 22192 on the downside while 22619-22794 band could offer resistance on the upside.,” Jasani said.
Bank Nifty: According to Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, the BankNifty index faced selling pressure from higher levels but maintained its uptrend, closing near the immediate support of 49,000. Immediate resistance is at 49,200, and a break above could trigger short-covering moves towards 49,500 levels. Conversely, immediate support lies at 48,800-48,700, and a breach might lead to further downside towards the 48,400 mark, where the 20DMA is situated, Shah added.
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