Markets Opening: Sensex, Nifty Likely To See Volatile Start As Weak Global Cues To Be Spoilsport

Indian markets are likely to continue in a volatile mood on Friday. Gift Nifty traded in the green, hinting at a positive opening for Sensex and Nifty 50. However, weak global cues, spikes in bond yields concerns over higher interest rates and China's economic dilemma will be among the key triggers to influence domestic equities. In the previous session, Sensex and Nifty 50 settled lower owing to sharp selling in FMCG and oil & gas stocks.

Gift Nifty, formerly known as SGX Nifty, traded at 19,301 up by 18 points or 0.09% at 7.05 am on Friday. The index opened at 19,283 and traded in the range of 19,307 to 19,271.5 respectively.

Traders will also react to RBI's monthly bulletin where the central bank has stated that the headline inflation to average 'well above' in July. However, RBI believes that stagflation risk is low in the country despite price surges. Further, traders will react in some specific stocks after NSE indices rejig.

Meanwhile, in the early Asian hours, stocks dived due to a sharp selloff in US stocks, and also amidst treasury yields hitting a 10-month high as traders' mood dampened over expectations of longer-lasting high-interest rates and troubles revolving around China's economy.

Hong Kong's Hang Seng index traded lower by 0.5%, while the mainboard Shanghai Composite index traded broadly flat with a volatile tone. Japan's Nikkei 225 plunged 229 points or 0.8%, while South Korea's KOSPI index dipped 0.5%. Australian ASX 200 traded in red but at a slower pace than compared to its counterparts.

Overnight, Wall Street struggled as healthcare stocks dragged, on the other hand, upbeat economic data kept higher interest rates fear. The Dow Jones Industrial Average index plunged 0.84%, while the S&P 500 index shed 0.77%, and the tech-heavy Nasdaq Composite Index continued to be the top bear by settling with a 1.2% drop.

The US Federal Reserve continues to see signs of inflation risk in the country hence signalling more rate hike possibilities.

On Thursday, Indian markets closed in red due to feeble global cues. Midcap and smallcap stocks, however, held steady inflows and outperformed benchmarks. Both Sensex and Nifty 50 dipped by over half a per cent. Consumer durables were top bulls, while IT, FMCG and oil & gas stocks dragged the broader sentiment. India's volatility index ended up by 1%.

Sensex ended at 65,151.02, down by 388.40 points or 0.59%, while the Nifty 50 benchmark shed 99.75 points or 0.51% to settle at 19,365.25. On BSE, the Consumer Durables index surged by 660.44 points, while FMCG, Oil & Gas, and Utilities indexes dived by around 1% each. BSE IT index slipped by 108.42 points. In the broader market, BSE Midcap and Smallcap indexes advanced by 17.11 points or 67.14 points.

Friday's Trade Guide:

Vaishali Parekh, Vice President - Technical Research, Prabhudas Lilladher expects the Nifty Spot Index to find support around 19,250/19,200 during Thursday's trade, while resistance is seen at 19,500/19,550. Further, the Bank Nifty spot index is likely to find support in the range of 43,600/43,550 and resistance is seen between 44,200/44,250.

Intraday Stock Picks:

Parekh has recommended 3 stocks to buy on Thursday:

- Buy SBI at Rs 572.50 with a stoploss of Rs 564 for a target 595

- Buy Lemon Tree Hotels at Rs 96 with a stop loss of Rs 94 for a target of 102

- Buy BLS International at Rs 254 with a stoploss of Rs 250 for a target 267.

Also, Ajit Mishra, SVP - Technical Research, Religare Broking said, "We are in a corrective phase and seeing a gradual fall in the index but buying interest in select heavyweights is providing comfort in between. Besides, the prevailing outperformance of the broader indices is offering ample buying opportunities. Amid all, we maintain our view to focus on stock selection and risk management until the tone changes."

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, znor 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.