cautious opening likely, say analysts

NSE Nifty 50 index (India 50) could open on a cautious note on Wednesday after two days of consecutive gains as traders would look for exit opportunities, analysts told Capital.com. Anxiety remains in the system till there is clarity on inflation and rate hikes by global central banks, they said.

“The Nifty 50 Index is currently facing a crucial overhead resistance around 15,700-15,800 levels,” Nagaraj Shetti, technical research analyst at HDFC Securities said.

“Considering the significance of this value area, there is a possibility of weakness emerging from the hurdle. However, any consolidation or minor weakness in the next few sessions at the resistance could hint at the possibility of sharp upside breakout of 15,800 levels,” he added. 

The Adani share price could see some impact after it showed interest in a first-ever coal import deal while HDFC Bank has announced bold expansion plans. 

While there are no negative cues in the market, investors, according to analysts, would keenly await the US Federal Reserve chairman’s speech for cues. On the domestic front, the progress of the monsoon would be a key indicator.

“The near-term resistance for Nifty would be about 15,670-15,740. Once this band is breached, 15,863-15886 could be the next resistance.

Investors may prepare a list of stocks that they would like to offload in this bounce to raise cash. Nervousness in the markets will keep coming up unless we see signs of inflation stabilising and reversing globally which can be an early sign of bottom formation”, Deepak Jasani, head of retail research at HDFC Securities said.

Nifty 50 hot stocks

Adani Enterprises

Adani share price will be in focus as Adani Enterprises Ltd (AEL), a Gautam Adani group company, has shown interest in the first-ever coal import tender floated by state-owned miner Coal India, a local media report said.

Eleven bidders, including AEL, are interested in the tender to supply 2.4mt of coal, with an estimated contract value of INR31bn ($420m).

HDFC Bank

HDFC Bank, which has an 8.38% weightage on the NSE Nifty 50 index, said it plans to double its network in the next three to five years. To take the initiative ahead, the bank said it will open up to 2,000 branches every year.

Nifty on Tuesday

On Tuesday, Nifty ended up 1.88% at 15,638.80. The index garnered 288.65 points, which is its highest single day gain since May 17. Among sectors, oil , gas, and power plus realty, metals, consumer durables and information technology gained the most.

“Echoing global stock markets’ optimism amidst oversold conditions, domestic markets too staged a spectacular rebound. Benchmark Nifty 50 Index and many momentum stocks shined all-throughout the day,” Prashanth Tapse, vice president (research), Mehta Equities said.

“The buying stampede simply continued. We expect that the fear of missing out can rule traders’ mindsets as bargain hunting and value buying could be the probable theme,” he added. 

Read More