Special Live Trading Session On Saturday: BSE, NSE Open For 6 Days This Week; What To Expect?

Trading on BSE and NSE will be conducted for six days this week, thanks to a special live session scheduled to be held on Saturday, May 18, 2024. Both equity, equity derivatives, and futures & options markets will be open on the coming Saturday. This is part of BSE and NSE's compliance with Sebi's framework for a Business Continuity Plan (BCP) and Disaster Recovery Site (DRS) for stock Exchanges.

Trading on Saturday will be conducted in two parts. Firstly, the first half of the May 18 session will be on the primary site and the second half of DRS. It will be a transition from primary to DRS.

As per NSE's circular, members are requested to note that the Exchange shall be conducting a special live trading session with the intra-day switchover from the Primary site to the Disaster Recovery site on Saturday, May 18, 2024, in Equity and Equity Derivatives segments.

Last week, Sensex nosedived by 1,361.05 points or 1.84% to end at 72,664.47, while Nifty 50 plunged by 523.85 points or 2.32% to close at 22,055.20. Banking stocks were the top laggards of the trading week that ended on May 10, 2024.

Explaining last week's performance, Arvinder Singh Nanda, Senior Vice President, of Master Capital Services highlighted among Sectors Nifty FMCG jumped 1.85%, Nifty Auto jumped 1.36% and Nifty IT rose 0.8% in green. Nifty PSU Bank fell 6.03%, Nifty Media fell 4.25% and Nifty CPSE fell 3.84%. Gold rose to 72,727 hovering near an all-time high and delivering a gain of 2.91% whereas crude posted mixed performance by rising 0.08% closing at the 6,551 level.

Meanwhile, Santosh Meena, Head of Research, at Swastika Investment said, that Indian stocks witnessed a sharp correction after reaching record highs.

Also, Meena pointed out that investor sentiment turned cautious due to the upcoming elections and aggressive selling by foreign institutional investors (FIIs). This selling pressure overshadowed a strong performance in global markets, keeping domestic indices under pressure throughout the week. FII outflows were significant, exceeding ₹22,000 crore last week. While domestic institutional investors (DIIs) did buy Indian stocks to the tune of ₹17,000 crore, their buying wasn't enough to offset the selling by FIIs.

Additionally, the fear index India VIX surged more than 25% last week. High-beta sectors faced the brunt of the selling, while defensive sectors like FMCG, buoyed by positive earnings reports, performed well, Meena said.

Here's what to expect this week:

According to Meena, buckle up for a data-heavy week! Market volatility remains high as we inch closer to the next voting phases. Investors will be bombarded with economic data on both domestic and global fronts. Domestically, keep an eye out for the Consumer Price Index (CPI), Industrial Production Index (IIP), and Wholesale Price Index (WPI). Globally, the focus will be on the US Producer Price Index (PPI) and Consumer Price Index (CPI) figures. Additionally, Federal Reserve Chair Jerome Powell's speech will be a key event to watch. China's industrial production data and Japan's GDP figures round out the important releases for the week.

Singh said the outlook for the market will be guided by the major global and domestic economic data, India's WPI inflation data and WPI manufacturing data, U.S PPI data, Core CPI data, Initial Jobless Claims, Core Retail Sales data, Japan's GDP data, India Q4 company results and speech by Fed Chairman Jerome Powell.

Technical Outlook:

Nifty Index:

In Singh's view, the Nifty index has been trading within a broad range of 21,750 to 22,800 over the past few months, and it's currently approaching the lower end of this range, a critical support level at 21,750 for the short term. With a decisive break below the immediate support at 22,300 observed on Thursday, the Nifty is anticipated to experience further downward movement in the short term. Given historical patterns, there's a likelihood of a minor upward correction from this crucial support level in the upcoming trading sessions. The immediate resistance level is pegged at 22,250.

On the technical front, Meena said, the Nifty index has approached its lower trading range after a recent correction from its record high. Since the beginning of 2024, the index has exhibited a sideways consolidation pattern. Despite current volatility and downward pressure, a potential buying opportunity exists if Nifty can hold above its previous low of 21,777. A successful defence of this level could trigger a recovery. On the upside, the 22,200-22,400 zone presents a potential resistance area. If Nifty can overcome this hurdle, a short-covering rally might ensue. Conversely, a breach below 21,777 could lead to further selling pressure, pushing the index towards 21,550 and even 21,200.

Bank Nifty Index:

Singh believes that the Bank Nifty index is now targeting its next immediate support level at 47,200, and if breached, it could lead to intensified selling pressure, potentially pushing it down to around 46600. At present, the index encounters immediate resistance around the 48,000 mark, where there's a notable aggressive call-writing activity. A decisive breakthrough above this resistance level could prompt short-covering actions, potentially driving the index higher towards the 48,800 mark.

Currently, it finds itself hovering near its crucial 100-day moving average (DMA) at around 47,200. If the index can maintain this support level, a potential rebound is in sight. The initial hurdle on the upside would be the 20-DMA, positioned around 48,200. A breakout above this level could trigger short covering, propelling the index towards 48,600 and even 49,500. However, a breakdown below 47,200 could exacerbate selling pressure, dragging the index down to 46,600 and potentially even 46,200, as per Meena.

Lastly, Meena said, "Adding fuel to the volatility, foreign institutional investors (FIIs) have increased their short bets in index futures to multi-month highs of 1.6 lakh contracts, representing 66% of their total exposure. Any unwinding of these short positions (covering) could trigger a rebound in the market."

Terms and Conditions On Special Live Trading Session:

1. All securities (including those on which derivative products are available) will have a maximum price band of 5%. Securities already in the 2% or lower price band, shall continue to be available in the respective bands.

2. Price bands of 5% will be applicable on all close-ended Mutual Funds.

3. All futures contracts shall have a daily operating range of 5%.

4. No flexing of securities or futures contracts shall be applicable on that day.

5. The price band for Equity segment and Futures contracts which will be applicable at the start of the day at DC shall be applicable at DR too. Any changes in price bands of options contracts due to market factors up to the close time at the Primary site would be carried forward to the Disaster Recovery site.