Global cues, F&O expiry, and Q4 earnings to remain factors for stock markets this week
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The Indian equity markets fell for the second week in a row last week, owing to negative global cues, earnings disappointment from IT names, and pain in the HDFC twins.
Following a huge decline in the US stock market on Friday in response to the US Fed’s hawkish comments and dismal profits, this week is likely to start on a grim note.
The market will react to ICICI Bank’s Q4 earnings on Monday, while other significant results planned for this week include Bajaj Finance, HDFC Life, Bajaj Auto, HUL, Ambuja Cement, Axis Bank, Bajaj Finserv, Vedanta, Indusind Bank, Maruti Suzuki, Ultratech Cement, and Wipro.
FIIs are constantly selling into Indian equity markets, and their actions will be crucial given fears of aggressive rate hikes in the United States.
The Russia-Ukraine conflict remains unpredictable, and the market will keep a close eye on crude oil prices.
If we look at the derivative data, we can see that the put-call ratio is at 0.91 and that FIIs’ long exposure in index futures is at 47%, both of which are approaching the oversold zone.
In terms of OI distribution, the put side has the greatest OI at 17,000 points. We should see more selling pressure below this level. On the plus side, call option open interest is evenly spread between 17,200 and 17,500.
The Nifty has a crucial support level of 16,800 on a technical basis. The Nifty is vulnerable to a big drop if it falls below this level. However, as a 61.8 percent retracement of the previous rise, 16,600 is another level of support.
On the upside, the 100-day moving average of 17,300 is an immediate and powerful barrier, while the 20-day moving average of 17,450 is the next significant barrier.
The psychological support level of 36,000 is likely to be breached by Bank Nifty, with 35,000 being the next key support level. On the plus side, the supply zone of 36,500–37,000 is critical.
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