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Indian equity benchmarks recovered most of the day's losses in a choppy session on Wednesday helped by strength in IT, healthcare and FMCG stocks, though weakness in auto and financial shares played spoilsport.

Globally, investors awaited the release of the Fed's Beige Book — which summarises the state of the world's largest economy — due later in the day.

What do the charts suggest for Dalal Street?

The Nifty50 has formed a long bull candle on the daily chart, reflecting sideways movement in the market around 17,400-17,750 levels, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

The emergence of buying interest at the lower levels on the the 50-scrip index is a positive indication, he said.

A breakout awaited in the banking index

The Nifty Bank appears to be stuck in a 1,500-point range with stiff resistance at 40,000 and support at 38,500, said Kunal Shah, Senior Technical Analyst at LKP Securities.

"A break on either side will lead to a trending move... A breach of immediate support at 39,200 will see a further decline towards the 38,800-38,500 zone. The bias remains on the buy side as long as the support level is held," he said.

Here are key things to know about the market ahead of the September 8 session:

SGX Nifty

On Thursday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty index — rose as much as 131.5 points or 0.7 percent to 17,762 ahead of the opening bell on Dalal Street.

Global markets

Equities in other Asian markets began the day in the green, following a strong session on Wall Street overnight, as investors overlooked hawkish remarks made by Fed officials. MSCI's index of Asia Pacific shares outside Japan was up half a percent at the last count. Japan's Nikkei 225 was up 2.1 percent.

S&P 500 futures were flat, suggesting a muted start ahead on Wall Street. On Wednesday, the three main US indices jumped 1-2 percent to four-week highs as bond yields eased.

What to expect on Dalal Street?

HDFC Securities' Shetti is of the view that an attempt by the Nifty50 towards the hurdle of 17,800 in the coming sessions cannot be ruled out.

"The index's short-term trend remains rangebound at 17,400-17,750 levels. As the Nifty has moved up from close to the lower end of the range, there is a possibility of it making an attempt towards the upper end as well as crucial resistance around 17,800 in the coming sessions," he said.

Key moving averages

Both Nifty50 and Nifty Bank stand above their long-term simple moving averages.

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

FII/DII activity

Foreign institutional investors (FIIs) emerged net purchasers of Indian shares on Wednesday, in line with the trend in the past few weeks.

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 2.3 lakh contracts, and the next highest at 17,900, with 1.4 lakh, according to exchange data. On the other hand, the maximum put open interest is at 17,000, with 2.1 lakh contracts, and at 17,500, with 1.6 lakh.

This indicates immediate resistance at 17,900 followed by a major hurdle at the 18,000 mark, and immediate support at 17,500 followed by a strong base at 17,000.

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)

First Published:Sept 7, 2022 8:26 PM IST