Global equity markets are trading with a positive bias, injecting optimism into the trading sentiment worldwide. This upbeat mood stems primarily from robust gains on Wall Street, fueled by softer-than-anticipated US consumer inflation data for November. The figures have solidified market expectations that the US Federal Reserve may implement further interest rate cuts, encouraging a shift towards riskier assets.
Global Catalysts and Domestic Concerns
The positive momentum was further amplified by an optimistic quarterly revenue outlook from chipmaker Micron Technology, which reignited enthusiasm around the artificial intelligence and broader technology sector. Consequently, the tech-heavy Nasdaq Composite surged 1.38%, while the S&P 500 and Dow Jones Industrial Average advanced 0.79% and 0.14%, respectively. Stability in US bond yields and a sharp drop in the fear gauge, the CBOE Volatility Index (VIX), underscore easing risk aversion.
Asian markets, including Japan's Nikkei 225 and South Korea's Kospi, mirrored this positive trend in early trade, albeit with caution ahead of the Bank of Japan's policy decision. This constructive global backdrop is expected to lend a mildly positive tone to Indian equities at the opening bell. However, analysts warn that persistent weakness in the Indian rupee near record lows and delays in finalising the India-US trade negotiations remain key near-term concerns, likely capping significant upside and keeping domestic investor sentiment guarded.
Nifty and Bank Nifty: A Precarious Balance
According to Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, the sentiment in the Indian stock market remains cautious. The Nifty 50 index, after testing its 50-day exponential moving average (DEMA) support at 25,750, witnessed a bounce-back but later pared gains to close near 25,800.
"The index, indicating a lower top formation on the daily chart resisting near the 26,050 zone, has slipped down," Parekh noted. She emphasised that the trend is precariously placed, with crucial support at the 50-DEMA level of 25,750. A sustained move above this support is vital to maintain the overall trend. For a positive trend to be confirmed, the Nifty must achieve a decisive close above the 26,000 mark. A breach below 25,750 could see the index testing the 25,450 to 25,350 band.
Regarding the Bank Nifty, Parekh observed that the index ended flat amid volatility, facing resistance near 59,200 before closing around 58,900. The index maintains its overall bias but with a cautious approach. It has crucial support near 58,700 and has been moving in a tight range. A decisive breakout above 59,600 is needed to establish conviction for further upward movement.
Intraday Stock Picks from Vaishali Parekh
For intraday trading on Friday, Vaishali Parekh recommended three stocks:
- Ashok Leyland: Buy at ₹171.55, target ₹180, stop loss ₹168.
- Sandur Manganese and Iron Ores: Buy at ₹211, target ₹223, stop loss ₹207.
- Hindustan Copper: Buy at ₹387.45, target ₹412, stop loss ₹379.
Parekh identified the immediate support for the Nifty 50 at 25,700 and projected a daily range for the Bank Nifty between 58,500 and 59,600.
Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies. Investors are advised to consult certified experts before making any investment decisions.
