Pre-stock market update for Wednesday, June 12, 2024: Equity benchmark indices may witness another choppy ride today as market participants brace-up for the May inflation numbers, factory output for the month of April.
On Tuesday, the Sensex and the Nifty ended on a flat note despite holding notable gains for a significant part of the trading day. Meanwhile, the Indian Rupee settled at a record closing low of 83.57 against the US dollar yesterday tracking the rise in Dollar index.
In focus today
At 07:00 AM, Gift Nifty futures quoted around 23,310 levels, hinting at a likely flat start to the trading action on the Nifty 50 index.
The data will be released post market hours on Wednesday. According to analysts at Trading Economics inflation might remain stagnant around 4.8 per cent. Whereas; the growth rate in the index of industrial production (IIP) and the manufacturing production may decline to 4.7 per cent and 4.9 per cent, respectively.
That apart, the focus will be on the US Federal Reserve meeting decision for likely clues on possible rate cuts in 2024. Most analysts fear that a better-than-expected US nonfarm payroll (May) and ISM services (May) reports have delayed the expected rate cut timing from July to September.
Stocks to watch
Shares of automobile companies, mainly those operating in the EV (electric vehicle) space will be in focus after Ola Electric received Sebi approval for its Rs 7,250 crore IPO.
Tata Steel: Expressing concern about policy differences between the UK government and the Opposition on the transformation plan at Port Talbot in Wales, Tata Steel said on Tuesday that it will continue with the announced closure of the heavy-end assets and the restructuring programme in the coming months.
Stocks in F&O ban today: Balrampur Chini, GMR Infra, Hindustan Copper, India Cement, SAIL and Zee Entertainment.
Global mood
Overnight, the S&P 500 and NASDAQ ended at record highs for the second straight trading session led by a sharp rally in Apple shares. Tonight, the US Fed rate decision is likely to dictate the trend. Meanwhile, Dow Jones fell 0.3 per cent.
The US 10-year yield quoted around 4.538 per cent. Among commodities, Gold futures traded around $2,330 per ounce, while Brent Crude Oil hovered around $82 per barrel.
Markets, in the Asia-Pacific region, traded with a negative bias this morning. The Australian equity benchmarks – the S&P ASX 200 and All Ordinaries slipped 0.4 per cent each. Japan’s Nikkei dipped 0.7. per cent. Kospi, however, was up 0.2 per cent.
Fund flow action
Foreign institutional investors (FIIs) were net sellers of stocks worth Rs 111 crore on Tuesday; whereas, domestic institutional investors (DIIs) net bought shares to the tune of Rs 3,193 crore.
In the derivatives segment, FIIs index long-short ratio further improved to 0.58, with net index shorts now at 63.39 per cent as against a high of 87.25 per cent on June 04.
Trading strategy for Wednesday, June 12 – Should you be a buyer or seller today? Here’s what market experts recommend:
Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities
The Nifty formed a doji candle on the daily chart, which signals indecision. The 23,000 Strike saw call writers exiting (bears exit) and put writing (bulls’ entry). On the other hand, the 23,200 & 23,300 Strike saw significant put writing. Both the call & put writers battled out at the 23,300 Strike and the option activity at this strike will provide cues about Nifty’s upcoming direction.
The Bank Nifty has formed consecutive doji candles on the daily chart. The 49,500 & 49,800 Strike saw significant put writing. The maximum put open interest is placed at the 49,500 Strike and the option activity at this strike will provide cues about Bank Nifty’s Intraday direction ahead of the weekly expiry on Wednesday.
Om Mehra, Technical Analyst, SAMCO Securities
The Nifty continues to consolidate with a positive bias, sustaining above the upper band of its rising channel. The immediate support remains at 22,200, and if this level is breached, the index could slip towards the 23.6 per cent Fibonacci retracement level situated at 21,900. A move above 23,350 will resume the uptrend.
The Bank Nifty has formed a bearish candle with a small body. The index failed to surpass the 50,000 level but remains above its short-term moving average. There could be slight weakness if the index slips below 49,600, which might lead to a test of the 49,300-49,100 levels. However, the primary trend remains strong as long as the 49,000 level is sustained.
Rupak De, Senior Technical Analyst, LKP Securities
The Nifty might remain sideways until it breaks out of the 23,150 – 23,350 range. Any decisive breakout on either side might confirm the future direction of the market. On the higher end, above 23,350, it might move towards 23,600. Meanwhile, support below 23,150 is placed at 23,000 – 22,900.
