Profit booking may dominate in early trading today

After yesterday’s rise, profit booking can take place today in the early morning. This may cause Indian stock markets to start the day in red. SGX Nifty also opened the day in red. It is down 0.71% since this morning. Oil prices rose again yesterday. Oil is now trading at around $99 a barrel. Any rise in the price of oil is always negative for the Indian economy.

US markets had a volatile day yesterday. Dow Jones swung over 660 points before closing near session lows, down 200 points. The Nasdaq also saw intraday moves of more than 300 points before closing down 100 points. Bond yields remained close to 2.98%. Crude prices closed near US$99 a barrel.

Asian markets opened mixed with the Japanese ‘Nikkei’ which is trading higher after being closed for a holiday yesterday. Other Asian markets are following US signals and trading lower in early trading. Chinese stocks will respond to the reopening of the Covid lockdown. Metals destocking could see more ETF flows into metals stocks. The Hong Kong Monetary Authority defends the Hong Kong dollar against the US dollar through currency interventions.

Nifty had another day of stunning gains as short hedging coupled with value buying saw overseas and local mutual funds turn into buyers in some large-cap stocks. This pushed the index up 200 points. Bank Nifty also joined the rally, gaining over 676 points as mid-cap banks saw buyer interest. Hindalco.

Technical view: Nifty is likely to find support around 16,000 while 16,400 is likely to act as resistance on the upside. Bank Nifty is likely to find support around 34,700 while 35,500 is likely to act as resistance.

TRADING call (1-2 days): SELL Hindalco July future at 366-369. Stop loss: 374.85. Target: 360

Derivative call period (1 month): SELL Indusind Bank Future July at 847-851. Stop loss: 865.95. Target: 832