Indian equity benchmarks continued to fall for a third straight session on Thursday, dragged by financial, oil & gas, auto, metal and IT shares. Globally, investors' focus returned to the prospect of aggressive tightening of COVID-era monetary policies.

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All eyes were now on the outcome of the RBI's first policy deliberations of FY23 due on Friday.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a reasonable negative candle on the daily chart with a minor upper shadow, though the positive sequence of higher tops and bottoms is in play, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

The short-term trend of the 50-scrip index remains negative, he said.

More weakness ahead?

The intraday texture of the market has turned weak and a fresh pullback rally is possible only after the index breaks out above 17,900, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.

"For traders, 17,900 will act as an immediate hurdle, below which, a weak formation is likely to continue till 17,700-17,650 levels. However, above 17,900, the index could move up to 17,820-17,865 levels," he said.

Here are key things to know about the market before the April 8 session:

SGX Nifty

At 8:29 am on Friday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were up 12 points or 0.1 percent at 17,750.5, having risen as much as 29.5 points earlier in the day.

Global markets

Equities in other Asian markets began the day in the red, with MSCI's broadest index of Asia Pacific shares outside Japan trading 0.4 percent lower in early hours. Japan's Nikkei 225 was down 0.3 percent, China's Shanghai Composite 0.2 percent and Hong Kong's Hang Seng 0.4 percent. South Korea's KOSPI was down 0.1 percent and Singapore's Straits Times 0.5 percent.

S&P 500 futures were flat. On Thursday, the S&P 500 rose 0.4 percent, the Dow Jones 0.3 percent and the Nasdaq Composite 0.1 percent.

What to expect on Dalal Street

HDFC Securities' Shetti mentioned support at 17,600, the index's 10-day exponential moving average, and critical support at around 17,450-17,500 levels.

He expects Friday's RBI announcements to give fresh direction to the market. He sees the Nifty bouncing from the lows of around 17,550-17,450 in the next couple of sessions.

Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas, expects selling pressure to get absorbed near 17,550-17,500 levels.

He believes the index has stepped into a short-term consolidation phase. He expects consolidation in the range of 17,500-18,000 over the next few sessions.

Levels to watch out for

The Nifty50 has cracked 186.1 points below its five-day simple moving average, though it still holds 518.8 points above its 200-day level.

Mohit Nigam, Head-PMS at Hem Securities, pointed out the following levels:

FII/DII activity

Foreign institutional investors (FII) net sold Indian shares worth Rs 5,009 crore on Thursday, data shows. Domestic institutional investors (DIIs), however, made net purchases of Rs 1,774.7 crore.

Call/put open interest

According to provisional exchange data, the maximum call open interest is accumulated at the strike price of 18,000, with 1.3 lakh contracts, and the next highest at 17,700, with 1.2 lakh contracts. On the other hand, the maximum put open interest is at 17,600, with 1.4 lakh contracts, and the next highest at 17,500, with 1.1 lakh contracts.

This suggests immediate resistance at 17,700 followed by the major hurdle of 18,000, and immediate support at 17,600 followed by a strong cushion at 17,500.

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

52-week highs

A total of 25 stocks in the BSE 500 pack -- the broadest index on the stock exchange -- hit 52-week highs:

52-week lows

No BSE 500 stock hit a 52-week low.

Fear gauge

The India VIX -- also known as the fear index -- eased 0.1 percent to settle at the 19 mark on Thursday, having moved within a range of 17.7-19.5 during the session. Russia's move to invade Ukraine in late February had sent the VIX soaring to a 20-month peak of almost 34.

(Edited by : Abhishek Jha)

First Published:Apr 7, 2022 5:51 PM IST