Indian markets could open in the red, due to profit booking

Indian markets could start the day today in the red. Due to the gains seen yesterday, some degree of profit booking is likely to be seen in early trade. Many investors are likely to make short-term gains by selling their stocks. Indices from other foreign stock markets are also negative today. SGX Nifty is also in the red today, down 1.49%.

US markets sold off as rising yields and rising global inflation weighed on equities. Dow Jones fell more than 600 points. The Nasdaq fell more than 2.7% as it closed near the day’s lows. Bond yields closed near 3.04%. Oil prices remained firm at close to US$121.

Asian indices opened weakly on the back of weak US signals. The Japanese ‘Nikkei’, which was posting strong gains this week, is trading down 350 points as the weekend blues sees market sentiment at its weakest. will also see pressure as Covid cases see a partial lockdown in Shanghai.

Nifty had another volatile day as weak US indices saw the index open down around 115 points to see a strong rebound by the end of the day. It closed up more than 121 points. Bank Nifty also saw intraday swings of over 500 points before closing up over 130 points. Dr. Reddy, BPCL and Reliance led the winners. Tata Steel, Shree Cement and Grasim led the losers. The Nifty Next 50 index also closed up 0.78%, showing the market’s broader gains.

Technical view: Nifty will likely find support around 16200 while 16700 will likely act as resistance on the upside. Bank Nifty is likely to find support around 34400 while 35500 is likely to act as a resistance level.

TRADING call (1-2 days): Sell the LIC Housing June futures contract at 340-344. Stop loss: 348.75. Target: 335

Derivatives Call Period: (1 month): Sell June PEL futures contract at 1735-1745. Stop loss: 1774. Target: 1705