 "Pre-market: GIFT Nifty hints gap-up open; Bank Nifty expiry; FII, DII flows")
Pre-market stock update for May 15, Wednesday: Gift Nifty hinted at a positive start to the trading action on the Nifty today.
At 07:00 AM, Gift Nifty futures quoted at 22,377, suggesting a likely opening gain of 50 odd points on the Nifty 50 index.
Among key stocks - Bharti Airtel will react to its Q4 numbers released post market hours on Tuesday, the telecom major reported a 31 per cent YoY drop in net profit at Rs 2,071 crore. Cipla too will be in focus on reports that the Hamied family are planning to sell 2.53 per cent stake in Cipla via block deals on Wednesday.
Even as the Nifty has bounced back from lower levels, analysts expect the overall mood to remain cautious ahead of US CPI data later tonight, which shall shed some more light on the likely timing on the Fed rate cut.
Investors are cautious ahead of the upcoming U.S. CPI data, which is anticipated to show a slight increase from the previous month and could raise concerns about rate cut expectations, Vinod Nair, Head of Research at Geojit Financial Services said in a note.
Volatility and range-bound trading are likely to persist in the near term, given the ongoing uncertainty surrounding the low turnout, Vinod Nair added.
Fund flows
More From This Section
Even as stocks have bounced back, foreign investors continue to remain aggressive sellers this month. On Tuesday, FIIs net sold stocks worth Rs 4,065 crore, taking the May month’s tally to Rs 33,540 crore.
On the other hand, domestic institutions have managed to absorb bulk of the selling pressure. DIIs net bought shares to the tune of Rs 3,528 crore yesterday, and are net buyers at Rs 26,500 crore so far this month.
Trading strategy for Wednesday, May 15 - Should you be a buyer or seller today? Here’s what market experts recommend:
The weekly Bank Nifty PCR (Put Call Ratio) stands at 0.78 per cent on the day of expiry. Options data shows presence of highest Open Interest (OI) at 48,000 Strike Call, with notable OI addition at 48,500, 48,400, 48,300 and 48,000 Calls.
On the other hand, highest OI in Bank Nifty Puts stands at 47,000 Strike followed by 47,500 and 47,800. Notable OI addition was visible from 47,700 – 47,900 Puts.
Analysing the F&O data, Ashwin Ramani, Derivatives & Technical Analyst of SAMCO Securities expects the Bank Nifty to move higher if call writers exit from the 48,000 Strike ahead of the weekly expiry today.
Meanwhile on the Nifty, the 22,200 & 22,300 Strikes saw decent put writing (Bulls activity). The maximum put open interest is now placed at the 22,000 Strike, which will act as an immediate support for the Nifty. If Call writers exit from the 22,200 Strike, Nifty can move higher, the analyst said.
Om Mehra, Technical Analyst at SAMCO Securities says, the Bank has maintained its upward trajectory above the 40 Exponential Moving Average (EMA) which is placed at 47,780 and stayed above the middle Bollinger band in the hourly chart. Breaking 48,100 could pave the way to 48,450 on the upside, while a drop below 47,400 might signal a shift to a bearish outlook.
Meanwhile, commenting on the outlook for the Nifty, Neeraj Sharma, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates said, as per the hammer candlestick pattern, as long as the Nifty holds the support of 21,820, the relief rally will continue. The 21-DEMA is placed near 22,305, which will act as an immediate hurdle for the index, beyond which a pullback to 22,500 levels can be possible.
Stocks in Focus
Aadhar Housing Finance and TBO Tek to debut on the bourses today. The former IPO was subscribed 25.5 times, while the latter’s 86.7 times.
Dixon Technologies, Goa Carbon, Granules India, HPL Electric, ICRA, Indian Energy Exchange (IEX), Jindal Stainless, Jyothy Labs, LIC Housing Finance, Mankind Pharma, MOIL, Nagarjuna Fertilizers, NCC, NLC India, Paradeep Phosphates, Power Finance Corporation, Redington, Keystone Realtors, Thomas Cook, Thirumalai Chemicals and Titagarh Rail Systems are few of the prominent companies scheduled to announce March quarter earnings on Wednesday.
Global markets
Overnight, the US market ended higher with Nasdaq scaling fresh life-time high a day ahead of the crucial CPI inflation data. Dow Jones and the S&P 500 gained 0.3 per cent and 0.4 per cent each, while Nasdaq jumped 0.8 per cent.
The US 10-year bond yield eased to 4.443 per cent on Tuesday. Among commodities, Gold quoted around $2,360 levels, while Brent Crude Oil hovered around $82.50 per barrel.
This morning in Asia, Nikkei and Taiwan gained around 0.5 per cent each. Kospi was up marginally. The Bank of Japan on Monday sent a hawkish signal to markets by cutting the amount of Japanese government bonds it offered to buy in a regular operation.