 "Pre-mkt check: US Fed decision, global stocks, Nifty key levels for May 02")
Pre-market commentary for May 02, Thursday: As Indian stocks resume trading after the mid-week break, investors have a bountiful amount of news to digest, most importantly the US Fed meeting outcome.
US Fed hold rates...
On Wednesday, the US Federal Open Markets Committee (FOMC) post its two-day monetary policy meeting in an unanimous decision left the Fed rates unchanged at 5.25 per cent - 5.50 per cent, on expected lines.
At the subsequent press conference, according to a Reuters report, the Fed chair Jerome Powell suggested that while the central bank remains focused on bringing inflation back to its 2 per cent target, he noted progress toward that goal and dismissed the notion of an imminent rate hike.
That apart, the Job Openings and Labor Turnover Survey (JOLTS) report revealed that the US job openings fell to a 3-year low in March and showed signs of easing labor market conditions that could potentially aid the Fed in its fight against inflation.
...Global markets react
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The US benchmark indices which tumbled up to 2 per cent in the preceding trading session ended on a mixed note post US Fed meeting outcome.
Dow Jones which plunged 570 points in the preceding session ended 87 points higher at 37,903. The S&P 500 and Nasdaq, however, extended losses with a 0.3 per cent decline. More importantly, the US stock futures rose up to 0.6 per cent in post market trade.
Near home as well, Asian market started the day with sharp cuts, but are seen recouping losses. Japan’s Nikkei which slipped nearly 1 per cent at the opening bell, was down merely 0.2 per cent. Kospi was down just 0.1 per cent, while Taiwan slipped 0.5 per cent. On the other hand, Hang Seng gains 0.8 per cent, and Straits Times added 0.3 per cent.
At 07:00 AM, Gift Nifty futures quoted at 22,740, indicating a likely positive start to the trading action in Indian stocks.
Key levels to watch out on the Nifty & Sensex
From a technical standpoint, the Nifty index looks subtle, hovering above its 20 DEMA and nothing significant has changed on the levels from the previous session, despite the late sell-off, said Osho Krishan, Sr. Analyst - Technical & Derivative Research at Angel One.
The analyst recommends traders can maintain a positive stance and view dips as potential buying opportunities, instilling a sense of optimism.
Immediate support for the Nifty has shifted higher towards the 22,500 mark, followed by 22,400, coinciding with 20-DEMA. On the contrary, the lifetime high zone around 22,775 – 22,800 is expected to serve as immediate resistance before the Nifty heads toward the 23000-mark, the note stated.
Vinay Rajani, CMT, Senior Technical & Derivative Analyst at HDFC Securities believes that the Nifty chart shows lack of follow through action on the upside. The index formed a higher top and could form a higher bottom shortly. On monthly charts, The Nifty could now face resistance at 22,783 while 22,447 could offer support in the near term.
Vinay Rajani, CMT, Senior Technical & Derivative Analyst at HDFC Securities believes that the Nifty chart shows lack of follow through action on the upside. The index formed a higher top and could form a higher bottom shortly. On monthly charts, The Nifty could now face resistance at 22,783 while 22,447 could offer support in the near term.
On Thursday, the S&P BSE Sensex may swing in the range of 74,000 – 74,950 levels, with support seen around 74,200 – 74,100, and resistance around 74,775 – 74,865, the daily Fibonacci chart suggests.
Domestic triggers
As the market reacts to global triggers, the weekly F&O expiry and Q4 earnings shall also weigh on the market sentiment at home.
Over the trading break, the Godrej family announced a business split of the 127-year old conglomerate into two groups. Adi Godrej family got control of listed entities, while Jamshyd to own Godrej & Boyce and the land bank. The two businesses will now be known as Godrej Industries Group and Godrej Enterprises Group, with clear succession going ahead. READ MORE
On the earnings front, the Q4 numbers on an average seems to have been better-than-expected. Nishit Master, Portfolio Manager, Axis Securities PMS says that auto companies and the BFSI sectors in particular have reported strong results, and that has helped the Nifty cross the 22,700-mark.
Although we expect earnings growth momentum to continue, except for the IT and Chemicals sectors, we do not anticipate significant upward movement in the Nifty, as current high valuations could limit further gains, added Nishit in his note.
On Thursday, Adani Power, Ambuja Cements, Adani Wilmar stocks will react to Q4 numbers announced on Wednesday.
That apart, stocks of Adani Enterprises, Adani Ports, Ajanta Pharma, Aptech, Blue Dart, Ceat, Coal India, CoForge, Dabur India, Federal Bank, JBM Auto, Procter & Gamble Health, RailTel, Skipper, South Indian Bank and Voltamp Transformers among others will be in focus as these companies are scheduled to announce March quarter results on May 02, Thursday.