Wednesday was supposed to be a down day for Indian equities as most of the global markets sold-off post comments from Fed Chair Jerome Powell about interest rates turning out to be higher than originally envisaged.

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However, the index opened lower, recovered all its losses, and managed to close near the highest point of the day, registering the third straight day of gains.

However, despite the recovery, there is a slight catch. The Nifty 50 could not cross Monday's high of 17,799, meaning that 17,800 continues to be a resistance on the upside for the index.

BSE-listed companies have added market capitalisation of over Rs 6 lakh crore in the last three trading sessions. Gains on Wednesday were led by IndusInd Bank, Bajaj Auto and Adani Group companies.

Today's session will mark the weekly options expiry of the Nifty 50 and Nifty Bank contracts.

"With this underperformance what we have seen is that the valuations which our markets were trading at have now gone back to long term averages. Even our relative premia to the emerging markets has now gone back closer to the long term average levels. So valuations clearly have corrected," Shibani Sircar Kurian of Kotak Mahindra AMC told CNBC-TV18.

She further said that despite the correction, the global uncertainties with regards to inflation and interest rates have not yet gone away. "We believe this uncertainty will last for some more time and hence while we may not see a big downside in the market, we may possibly continue to see volatility," she said.

What do the charts suggest for Dalal Street?

The Nifty 50 index has found support near its 9-day exponential moving average, which is near 17,597, according to Rohan Patil of SAMCO Securities. Although bullish candles have shown optimism amongst traders, the index needs to cross 17,800 - 17,850 on the upside for a shift in momentum. On the downside, he sees support at 17,600 and 17,550.

On the downside, puts are being written at 17,500 and 17,600 strikes of the Nifty 50, according to Devarsh Vakil of HDFC Securities. Therefore, he considers 17,500 could now be considered as an immediate support for the index. He advises traders to remain bullish with a stop loss of 17,500. On the upside, 17,800 can be an immediate resistance, above which the index can move to 17,924 and 18,135.

The Nifty Bank index gained over 200 points on Wednesday to end above the mark of 41,500. Kunal Shah of LKP Securities advises traders to keep a buy-on-dips approach with an immediate support at 41,200. In case levels of 42,000 get taken out, Shah expects the index to move further higher towards 43,000.

Here are key things to know about the market ahead of the trading session on March 9:

SGX Nifty

On Thursday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — was little changed at 17,803, thereby pointing to a flat opening for the market.

Global Markets

Benchmark indices on Wall Street had a mixed session on Wednesday as investors weighed the possibility of higher interest rates.

The Dow Jones ended lower for the second day in a row, declining 0.2 percent. On the other hand, the S&P 500 gained 0.1 percent, while the Nasdaq added 0.4 percent after Tuesday's sell-off.

Fed chair Jerome Powell reiterated his warning message to lawmakers that the central bank may raise interest rates higher than previously anticipated. However, he added that no decision on the March meeting has been made yet.

What to expect on Dalal Street

Ruchit Jain of 5paisa continues to see 17,800 - 17,900 as a hurdle for the Nifty 50, which also coincides with the 38.2 percent retracement of the recent corrective phase. He expects any correction to be just a pullback and to be utilised as a buying opportunity. Immediate support on the downside is seen between17,600 - 17,500.

Rajesh Bhosale of Angel One expects downside support for the Nifty 50 to be between 17,600 - 17,570 and advises utilising any dip towards this level as a buying opportunity on the weekly options expiry session.

LKP's Shah believes that the Nifty 50 index remains in a buy mode as long as it holds the key support level of 17,500 on the downside, where fresh put writing has been observed. He sees an immediate hurdle for the index at 17,800, above which it can see further short-covering towards levels of 18,000.

Key Levels To Track

For today's weekly options expiry, the 17,800 strike call of the Nifty 50 index added 30.1 lakh shares in Open Interest. The 17,850 call and 17,900 call added 28 lakh and 26 lakh shares in Open Interest. The 18,300 call shed 13.4 lakh shares in Open Interest.

On the downside, the 17,600 put added 53.9 lakh shares in Open Interest, followed by the 17,700 put, which added nearly 43 lakh shares.

Nifty 50's put-call ratio now stands at 1.26 from 1.12 on Monday. Balrampur Chini will be in the F&O ban for today's session.

FII/DII activity

Long Build-up (Increase In Price and Open Interest)

Short Build-up (Decrease In Price and Increase In Open Interest)

First Published:Mar 9, 2023 4:55 AM IST