Sensex, Nifty May Open In Red On Feeble Global Cues, Inflation Data; 3 Stocks To Buy Today

Indian market is likely to open in red on Wednesday tracking feeble global cues. Also, investors are set to react to the higher-than-expected spike in CPI inflation for July. Gift Nifty traded lower hinting at a downside in the opening bell for Sensex and Nifty 50, while Asian shares fell tracking selloffs in Wall Street overnight. In the previous session, Sensex and Nifty 50 ended in the green, however, the upside was limited due to sharp selling in Adani shares.

Gift Nifty, formerly known as SGX Nifty, traded at 19,378.5, down by 95.5 points or 0.49% at 6.53 a.m. on Wednesday. The index's performance ranged between 19,399.5 to 19,364.0 levels after opening at 19,474.0.

Domestic equities will react to CPI inflation which has risen higher than market expectations. In July 2023, the consumer price index (CPI) accelerated to 7.44%, the highest level since April 2022. This huge upside is due to a sharp spike in food prices. Food inflation zoomed to 11.51%. Inflation has also breached RBI's upper tolerance limit for the first time since March 2023.

On the Asian front, stocks tumbled tracking the downside in Wall Street overnight due to selloffs in US banks. Japan's Nikkei 225 dipped by 338 points or 1.05%, while South Korea's KOSPI index shed 1.40%, and Australia's ASX 200 benchmark plummeted by 1.5%. Furthermore, due to China's economic uncertainties, Hong Kong shares dipped over 1.2%, while the mainboard Shanghai Composite index plunged marginally by 0.4%.

China is set to release its house prices data for the July month which will be keenly watched given the country's latest real estate crisis.

In a surprising move, the People's Bank of China on Tuesday cut its MLF rate to 2.5%, a big cut from earlier 2.65%. Also, the central bank has trimmed the 7-day reverse repo rate to 1.8% from the previous 1.9%.

Wall Street witnessed steep selling on Tuesday after stronger-than-expected retail sales data fuelled concerns of interest rates to stay higher longer than desired. Also, US banks fell sharply following reports that after Moody's, Fitch is next in line to downgrade some of the lenders.

Overnight, the Dow Jones Industrial Average dipped 361.24 points or 1.02%, while the S&P 500 index shed 52 points or 1.2%. The tech-heavy Nasdaq Composite dived 157.28 points or 1.1%.

Trading in Indian equities was shut on Tuesday due to the Independence Day celebration. However, on Monday, Sensex and Nifty 50 ended in green after steep volatility as Adani Group stocks nosedived. Sensex ended at 65,401.92, up by 79.27 points or 0.12%, while Nifty 50 edged higher by 6.25 points or 0.03% to end at 19,434.55. India's volatility index ended at 4.10%. BSE IT index soared by 199.29 points to become the top gainer and also lifted the broader market. Infosys was the top bull on this day. Also, BSE Midcap and Smallcap indexes slipped by 132.68 points and 177.40 points respectively on Monday.

Meanwhile, the Nifty 50 options expiring on August 17, are positioned around 19,600 and 19,500 calls and 19,400 and 19,500 puts. Further, the Nifty ranges from 9,000 and 19,800 levels for the August 31 expiry, and 19,200 and 19,600 are the week's immediate support and resistance levels.

In the case of futures, the Nifty expiry on August 31, closed at 19,471.20, down by 33.15 points or 0.17%.

Further, foreign institutional investors (FIIs) sold Rs 2,324.23 crore worth of Indian stocks on August 14, while domestic institutional investors (DIIs) were net buyers with an inflow of Rs 1,460.90 crore on the day.

Lastly, after hitting the day's low of 83.1525, the rupee ended at 82.95 per dollar compared to its previous session's print of 82.8450 per dollar.

Wednesday's Trade Guide:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects Nifty Spot Index support to be around 19300/19250, while resistance to be in the range of 19550/19600. Meanwhile, Bank Nifty spot index support is likely around 43700/43650, and resistance at 44500/44550.

Intraday Stocks To Buy:

Parekh has recommended 'Buy' on three stocks for Thursday's trade. These are:

- Buy Cochin Shipyard at Rs 687.50 with a stoploss of Rs 678 for target price of Rs 725.

- Buy Varun Beverages at Rs 868 with a stoploss of Rs 856 for a target price of Rs 905.

- Buy NMDC at Rs 118.70 with a stop loss of Rs 117 for a target price of Rs 123.

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author nor 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.