Indian equity benchmarks moved further away from record highs on Wednesday amid weakness across global markets. Losses in financial stocks along with heavyweights such as Reliance Industries and HUL pulled the Nifty50 lower, though gains in metal and pharma shares limited the downside. A monthly derivatives expiry due on Thursday also kept investors on the back foot.

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So, what do the charts suggest for Dalal Street?

The 50-scrip index formed a small positive candle with minor upper and lower shadows, which normally suggests a halt in the current trend but needs to be confirmed with a reasonable upmove ahead, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

Any positive close on Thursday could bring bulls back into action for the short term, he said.

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Brace for volatility ahead of F&O expiry

Rahul Sharma, Co-Founder of Equity99, said Nifty50 is heavily volatile and is expected to remain so ahead of the derivatives expiry. He expects spaces such as banking, telecom, pharma and power to remain in focus.

Here are key things to know about the market before Thursday's session:

SGX Nifty

At 8:19 am on Thursday, Nifty futures trading on Singapore Exchange -- an early indicator of the Nifty50 index -- were down 55.5 points or 0.3 percent at 17,686.5, suggesting a negative start ahead on Dalal Street.

Global markets

Equities in other Asian markets were down in early deals, with MSCI’s broadest index of Asia-Pacific shares outside Japan down 0.5 percent, while Japan's Nikkei 225 index was down 0.4 percent .

Shares of debt-laden China Evergrande Group rose more than five percent, even as some offshore bondholders said they had not received a due coupon payment by the close of Asia business the previous day. Evergrande missed a bond interest payment last week and had another coupon payment of $47.5 million due on Wednesday.

S&P 500 E-Mini futures were up half a percent in early Asian trade, hinting at a positive start ahead on Wall Street a day after two of the three key US indices rose 0.2-3 percent, but the tech stocks-heavy Nasdaq Composite gauge fell 0.2 percent.

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What to expect on Dalal Street

"On Thursday, again, we expect an expansion of the trading range in the market. The Nifty is finding resistance at the 17,790-17,800 level, beyond which, we would see short-covering up to 17,860-17,880 levels. Below 17,690, the chances of the index hitting 17,600 would increase," said Shrikant Chouhan, Head-Equity Research (Retail) at Kotak Securities.

HDFC Securities' Shetti believes the short-term trend remains negative for the index. But lack of sharp follow-through selling and the emergence of buying from lower supports suggest chances of a bounce in the next 1-2 sessions, he said.

Key levels to watch out for

Nifty50: Immediate support for the index is expected at 17,575, followed by 17,500- 17,450 levels, and immediate resistance at 17,750, followed by the 17,800-17,850 band, according to Sharma.

Bank Nifty: For the banking index, he pegs support at 37,500-37,315 levels, and crucial resistance at 37,900 and 38,100.

FII/DII activity

Foreign institutional investors (FIIs) withdrew a net Rs 1,957.7 crore from Indian equities on Wednesday. Domestic institutional investors (DIIs), however, made net purchases of Rs 161.5 crore, exchange data showed.

Call/put open interest

While the maximum call open interest is placed at 18,000, there is high accumulation at 17,900 and 17,800. On the other hand, the maximum put open interest is at 17,600, and next at 17,500, NSE data shows. This suggests immediate resistance can be expected at 17,800 and support at 17,600.

Long build-up

Here are five stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:

Long unwinding

(Decrease in open interest and price)

Short-covering

(Decrease in open interest and increase in price)

Short build-up

(Increase in open interest and decrease in price)

Stocks hitting 52-week highs

Sun Pharma, Cipla, Indian Oil, ONGC, NTPC, Coal India, Power Grid, NHPC, Hindalco and Titan were among the 34 stocks in the BSE 500 index — the broadest gauge on the stock exchange — that clocked 52-week highs.

52-week lows

No stock in the BSE 500 universe hit a 52-week low. Apart from that, CarTrade Tech, Rolex Rings and Sansera Engineering were among the 24 stocks that hit the trough.

Volatility gauge

NSE's India VIX index -- which gauges the expectation of volatility in the near term -- rose 1.6 percent to settle at 18.8 on Wednesday -- its highest closing level recorded since May 27.

(Edited by : Aditi Gautam)

First Published:Sept 29, 2021 7:27 PM IST