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Indian equity benchmarks failed to stay in the green on Wednesday after the the RBI gave the key lending rate a lift along expected lines, sending most of rate-sensitive stocks rising. The Nifty50 gave up a key support level — 16,400 — decisively after the central bank's policy announcements.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a reasonable negative candle on the daily chart, suggesting more of choppy waters ahead with a negative bias, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

"The market failed to sustain momentum after a swift intraday recovery following RBI announcements... The positive pattern of higher tops and higher bottoms is intact on the daily timeframe, and the current weakness could be a part of a new higher bottom formation," he said.

RBI policy a non-event?

"The Nifty Bank appears to be stuck in a broad range between 34,500 and 36,000, where a significant amount of put and call writing exists. The undertone remains bearish as long as the index stays below the immediate hurdle of 35,500," said Kunal Shah, Senior Technical and Derivatives Analyst at LKP Securities.

The RBI policy turned out to be a non-event for the banking index, he said.

Here are key things to know about the market ahead of the June 9 session:

SGX Nifty

Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — fell as much as 94.5 points or 0.6 percent to 16,254.5, suggesting a lower opening ahead on Dalal Street.

Global markets

Equities in other Asian markets fell on Thursday amid rising US bond yields as well as the greenback, as investors worried about the outlook for more rate increases ahead of a key ECB meeting on Thursday. MSCI's broadest index of Asia Pacific shares outside Japan was down 0.2 percent at the last count.

China's Shanghai Composite, Hong Kong's Hang Seng and Singapore's Straits Times were down 0.3 percent each, and South Korea's KOSPI 0.6 percent. Japan's Nikkei 225 was up 0.2 percent.

S&P 500 futures were down 0.2 percent. On Wednesday, the three main Wall Street indices dropped as rising oil prices fuelled worries about inflation. The S&P 500 declined 1.1 percent, the Dow Jones 0.8 percent and the Nasdaq Composite 0.7 percent.

What to expect on Dalal Street

HDFC Securities' Shetti believes that the absence of intense selling pressure below its crucial support zone at 16,400 is a slightly positive sign.

He expects the choppy movement in the market to continue for another 1-2 sessions.

Important levels to track

Both the Nifty50 and the Nifty Bank are below their key simple moving averages, especially the 200-day levels.

Mohit Nigam, Head-PMS at Hem Securities, identified the following resistance and support levels:

FII/DII activity

Call/put open interest

The maximum call open interest is accumulated at the strike price of 16,800, with 1.9 lakh contracts, and the next highest at 16,600, with 1.8 lakh, according to exchange data. On the flipside, the maximum put open interest is at 16,000, with 1.3 lakh contracts, and 16,300, with almost 82,000.

This suggests immediate resistance has shifted 200 points lower to 16,600, and after immediate support at 16,000, a strong cushion is at the 16,000 mark.

Long build-up

Here are five stocks that saw an increase in open interest as well as price:

Long unwinding

(Decrease in open interest as well as price)

Short covering

(Increase in price and decrease in open interest)

Short build-up

(Decrease in price and increase in open interest)

52-week highs

One stock on the BSE 500 — the broadest index on the bourse — touched the milestone: Mangalore Refinery.

52-week lows

A total of 14 scrips hit 52-week lows:

Fear gauge

The India VIX — also referred to as the fear index — dropped 2.9 percent to settle at 19.8 on Wednesday, having cooled off after rising as much as 1.3 percent during the session.

ALSO READ: VIX stays high for 5th week running

(Edited by : Abhishek Jha)

First Published:Jun 8, 2022 7:25 PM IST