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Indian equity benchmarks gave up initial gains in a sharp U-turn amid volatile trade on Thursday, dragged by weakness in financial, IT, pharma and consumer durable stocks.

Globally, the mood remained sombre after a worse-than-expected US inflation reading dashed nascent hopes the Fed could be less aggressive with hikes in key interest rates.

What do the charts suggest for Dalal Street?

The Nifty50 has formed a long negative candle on the daily chart, reflecting selling pressure at the 18,100 hurdle, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

The 50-scrip index may find support around 17,750-17,700 levels in the short term, he said.

Banking gauge hits record and retreats

Profit booking at higher levels in the Nifty Bank suggests the 41,800-42,000 zone will likely act as an immediate hurdle, said Kunal Shah, Senior Technical Analyst at LKP Securities.

Support stands at 40,000 and the undertone of the banking index remains bullish, he said, suggesting traders to take a buy-on-dips approach as long as the level holds.

Here are key things to know about the market ahead of the September 16 session:

SGX Nifty

On Friday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — fell as much as 118.5 points or 0.7 percent to 17,760.5 ahead of the opening bell on Dalal Street.

Global markets

Equities in other Asian markets began the day deep in the red, mirroring a weak session on Wall Street overnight, as nervousness persisted among investors that the Fed had little reason to ease its rate hiking cycle. MSCI's broadest index of Asia Pacific shares outside Japan was down one percent at the last count.

Japan's Nikkei 225, Hong Kong's Hang Seng and China's Shanghai Composite were down 1.1 percent each.

S&P 500 futures were down 0.6 percent. On Thursday, the S&P 500 fell 1.1 percent, the Dow Jones 0.6 percent and the tech stocks-heavy Nasdaq Composite 1.4 percent.

What to expect on Dalal Street?

HDFC Securities' Shetti believes the Nifty remains in a short-term rangebound trend around the 18,100-17,700 band.

"There is a possibility of further consolidation or a minor downward correction," he said.

Key moving averages

The Nifty50 manages to hold one percent above its long-term simple moving average.

FII/DII activity

Foreign institutional investors (FIIs) took to net selling of Indian shares for a second straight day on Thursday, following a six-day-long buying spree.

Last month, they made net purchases to the tune of Rs 22,025.8 crore — the first month of net inflows after 10 straight months of outflows, whereas domestic institutional investors (DIIs) net sold shares worth Rs 7,068.9 crore.

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Call/put open interest

The maximum call open interest is accumulated at the strike price of 18,000, with 1.5 lakh contracts, and the next highest at 18,300 and 18,400, with 1.2 lakh each, according to exchange data. On the other hand, the maximum put open interest is at 17,500, with 1.2 lakh contracts, and at 17,850, with 1.1 lakh.

This indicates immediate resistance at the 18,000 mark and a firm base at 17,500.

Long build-up

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

Long unwinding

(Increase in price and decrease in open interest)

Short covering

(Increase in price and decrease in open interest)

Short build-up

(Decrease in price and increase in open interest)

52-week highs

A total of 40 stocks in the broadest index on BSE — the BSE 500 — hit 52-week highs.

52-week lows

Alembic Pharma and Sanofi were the only stocks in the 500-scrip basket to hit 52-week troughs.

First Published:Sept 15, 2022 5:50 PM IST