Market Snapshot
On Friday, the Sensex opened with a positive gap of 26 points at 12,570. It advanced to a high of 12,639 in early trades, but soon slipped into red owing to selling pressure at higher levels. Persistent selling in bank, cement and engineering stocks forced the index drop to a low of 12,316. Selective buying towards the end helped the index recoup some losses. The Sensex finally settled with a loss of 113 points at 12,430. In the process, the index ended the week with a loss of 455 points. Nifty Lost 35 points to close at 3608.
The NSE and BSE cash volumes were slightly lower compared to the previous day at INR 70 bn and INR 35 bn respectively. The F&O volumes were higher at INR 249 bn.
Sentiment Indicators
The Implied Volatility (IV) across Nifty strikes has slightly decreased to 31% levels. The WPCR of Nifty Options increased to 1.19 compared to the previous day while the 5 day average is 0.95.
Outlook
The markets are expected to remain range-bound in today’s trading session with participation expected to remain lackluster as seen in the last few trading sessions. On the domestic front, higher than expected inflation numbers led to a decline in the market.
Nifty has found support at 200 DMA at the 3580 levels. Though there has been continuous addition of fresh shorts in Nifty futures.
Banking sector will be an underperformer as worries over credit growth, high inflation which might see further tightening of liquidity by the RBI. IT sector is expected to remain an out performer and position in the sector against Nifty could be taken.
In shorter term the Nifty has a support at 3584 followed by 3568 and 3554 while the resistance is at 3643 followed by 3683.
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