NEW DELHI: When the Indian stock market opens on Monday after a rare four-day holiday, traders are likely to get a shock as global cues indicate that the benchmark indices may see a gap-down opening. The market was closed for Mahavir Jayanti and Good Friday followed by a two-day weekend last week. Though, in the meantime, trading in many of the overseas markets continued.
SGX Nifty, an early indicator of how the Nifty may open when market begins trading in the morning, trades at 17,325.20, down about 150 points from Nifty’s last close at 17,475.65. Indices in the US, including Nasdaq 100 and S&P 500, continued to fall amid selling.
If the market opens with cuts and closes in the red on Monday, it will be the fourth straight decline in as many sessions. Though, as we have seen many times in the last few months, a buying may begin at low levels, capping the loss for indices.
“Nifty is unlikely to break below 17,300. Buy on dips is likely to emerge supporting the market. Financials have the potential to support the market,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Bank and IT stocks may buzz during the session as the market will react to the earnings of two large companies–HDFC Bank and Infosys. Both reported a mixed bag of numbers and how the market reacts will be interesting to see.
Investors will be paying close attention to the March quarter earnings, the Russia-Ukraine issue, rising inflation statistics, and crude prices. Crude oil is still trading at over $100 a barrel. The economy and profit margins of enterprises that use it as a raw material for their products and services are the most threatened by its persistently high price.
“The market will keep a close eye on how prices develop throughout the course of the week. Any further price increases will be detrimental. The market will turn its attention to the Q4 earnings season, which will be led by IT and banking sectors, and we predict a strong quarter thanks to a rebound in loan growth and a stronger balance sheet,” said Mohit Nigam, Head – PMS, Hem Securities.
Aamar Deo Singh, Head Advisory, Angel One, said the market will continue to consolidate this week, with a strong tussle between bulls and bears. “Open Interest (OI) data in the current April series for Nifty50 indicates a Short build-up, and signals from technical indicators suggest that Nifty is likely to trade in the range of 17,250 – 17,750,” he said.
“A few technical indicators such as moving averages and ADX, a trend determination indicator, points towards a sideways play next week. Only a breach above or below the mentioned range could trigger a sharp move in either direction.”
For Bank Nifty, he said 36,600-37,800 is the range to watch out for this week.