Friday's Trade: Sensex, Nifty To Open Flat Amid Weak Global Cues, RBI Minutes

Indian market is likely to see cautious start on Thursday as traders will react to RBI's hawkish tone in minutes of meeting and also amidst week global cues. In the early hours, Gift Nifty edged up with volatile implications, hinting at a flat opening for Sensex and Nifty 50. Asian stocks nosedived with Japanese shares taking the most hit. In the previous session, Sensex and Nifty 50 ended in red dragged by pharma, consumer durables, and auto stocks.

Gift Nifty, formerly known as SGX Nifty, traded at 19,301.5, up by 8.5 points or 0.04% at 7.21 am on Friday. The index opened at 19,293 and traded in the range of intraday high and low of 19,331 to 19,290.5 respectively.

.

Investors will react to RBI's minutes of the latest policy where the central bank has hinted further rate hikes possibility due to re-emergng of inflationary pressures. Although, RBI expects vegetable prices shocks to calm ahead, however, it sees risks to the food and the overall inflation outlook from El Nino conditions, volatile global food prices and skewed monsoon distribution. And hence, RBI said these factors warrant a close monitoring.

Globally, markets will be awaiting for US Federal Reserve Chair Jerome Powell's speech at Jackson Hole, Wyoming, on Friday. It is indicated that the markets are likely not ready for a hawkish commentary from Powell.

At home, on Tuesday, Sensex ended at 65,252.34, lower by 180.96 points or 0.28%, while Nifty 50 dropped by 57.30 points or 0.29% to end at 19,386.70. However, the BSE Midcap and Smallcap index performed better by edging up 33.41 points and 76.79 points respectively. Pharma stocks were top losers followed by consumer durables, capital goods, and auto stocks. IT stocks were top gainers.

On the trading performance on August 22, Vinod Nair, Head of Research at Geojit Financial Services said, "The US market exhibited a positive trend as declining US PMI ignited hopes of a prolonged rate pause, calming US bond yields. Optimism in the domestic market was more visible in the IT sector, though sentiments were reversed in other major sectors, likely influenced by the prevailing global uncertainties. Despite this, mid- and small-cap stocks demonstrated resilience, and the decline in bond yields facilitated a resurgence in foreign investor buying momentum."

Wednesday's Trade Guide:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects the Nifty Spot Index to find support around 19,300/19,250 during Thursday's trade, while resistance is seen at 19,550/19,600. Further, the Bank Nifty spot index is likely to find support in the range of 44,200/44,150 and resistance is seen between 44,900/44,950.

Intraday Stock Picks:

Parekh has recommended 3 stocks to buy on Thursday:

- Buy Bector Foods at Rs 1076 with a stoploss of Rs 1057 for a target of Rs 1140

- Buy Madras Fertilizers at Rs 76.30 with a stop loss of Rs 75 for a target Rs 82

- Buy EID Parry at Rs 478.50 with a stop loss of Rs 472 for a target of Rs 505

Also, Ajit Mishra, SVP - Technical Research, Religare Broking said, "We have been maintaining a view stance to focus on stock selection amid choppiness and it is working well so far. Traders should avoid aggressive positions and prefer hedged trades until we see some clarity over the next directional move."

On Nifty 50, Rupak De, Senior Technical analyst at LKP Securities said that the index remained under the bear's grip as selling pressure emerged around the day's high, resulting in a decline below 19500. On the upper side, resistance is expected to persist in the range of 19450-19500. A definitive breakout or a closing above 19500 could potentially trigger a rally in the index. On the lower side, there is immediate support at 19300; a drop below this level might lead to panic in the market.

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.