In early trading hours after the open, both indices are trading higher, with the Sensex surging over 800 points, up 1% at 81,996.72. Similarly, the Nifty is trading above 24,932.85, up 250 points, or 1%.
Indian benchmark indices opened on a positive note on Wednesday. The BSE Sensex opened at 81,390.16, up 0.25%, while the NSE Nifty 50 started the session at 24,759.25 higher by 0.31%. The Nifty Bank index also gained in early trade, opening at 54,962, up 0.15%.
Market recap
On Tuesday, the Nifty 50 closed 262 points, or 1.05%, lower at 24,683.90, while the Sensex declined by 872.98 points, or 1.06%, to settle at 81,186.44.
“Nifty closed sharply lower by 1.05%, ending below the key 25,000 mark, with India VIX rising to 17.39. Midcap and Smallcap indices also fell 1.62% and 0.94%, respectively. Overbought technicals, FII selling, US downgrade, trade war worries, and rising Covid-19 cases weighed on sentiment. Key support for Nifty is seen at 24,386. Focus today is on Q4 results from Astral, Colgate-Palmolive (India), InterGlobe Aviation, IndusInd Bank, ONGC, and Power Finance Corporation. Stock action: Vodafone Idea plunged 12% in two sessions, DLF gained 2% on strong earnings, and Redington rallied on robust Q4 results. Bearish bias remains on Zomato, BHEL, and Jubilant FoodWorks. A short squeeze is likely only above 25,000,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.
Key things to watch today –
Top gainers in early trade
In early trading hours, among the top gainers include Sun Pharma, Maruti, HDFC Bank, Hindustan Unilever and Nestle.
Key laggards at this hour
On the flip side, the key stocks struggling in early trade include Eternal, IndusInd Bank, Adani Ports, NTPC, and Reliance.
Technical outlook
“From a technical perspective, after a positive market opening, selling pressure was consistently observed at higher levels. The daily chart has formed a long bearish candle, and the intraday chart indicates a continuation of the correction, which is largely negative. We believe that as long as the market remains below 24850/81700, the correction wave is likely to persist. On the downside, the market may retest the levels of 24550-24500/80800-80500,” said Shrikant Chouhan, Head Equity Research, Kotak Securities.
On the upside, market sentiment may shift if it rises above 24850/81700. If it does surpass this level, there is a greater potential for it to reach 25000/82200 and 25100/82500. The strategy should be to trade short around 24850; however, for that, we need to keep a stop loss at 24950. Between 24600 and 24500, the market is having a major support zone as well as the support of the 20-day SMA. Take a contra bet on buying around 24500 with a stop loss at 24400,” he added.
Asia-pacific markets trade mixed
Asian markets painted a mixed picture this morning. Japan’s Nikkei 225 dipped 0.22%, while South Korea’s Kospi surged 1.11%, buoyed by gains in tech stocks. The Asia Dow edged up 0.74% to 3,635.32, whereas China’s Shanghai Composite traded flat at 3,380.
Nifty outlook
“With almost 50% of the Nifty 500 constituents closing at the lowest point of the day, yesterday’s down move does signal a trend reversal, also suggested by the slippage past 24870, our downside marker. However, Nifty is now in the vicinity of 10 day SMA, which has steadfastly supported the trend on most days, since upside crossover a month back. Moreover, 76% of the Nifty 500 stocks are trading above this key SMA suggesting that there is a fair window for a bounce back. Alternatively, slippage past 24700 will signal continuation of the downmove aiming 24280-24060,” said Anand James, Chief Market Strategist, Geojit Investments.
Earnings watch: Key results to track today
A key driver for today’s market action will be the fourth-quarter earnings announcements from 132 companies, including several key players across sectors. Investors will be closely watching the financial performance of firms such as InterGlobe Aviation (IndiGo), IndusInd Bank, NTPC Green Energy, Power Finance Corporation (PFC), ONGC, Rail Vikas Nigam (RVNL), IRCON International, Colgate Palmolive (India), H.G Infra Engineering, Oil India, Star Cement, and VA Tech Wabag.