Investors welcomed the new year on a high note as data showed strengthening domestic business conditions. India's manufacturing purchasing managers' index rose to 57.8 in December from 55.7 in the previous month, with new orders rising at the fastest pace since February 2021. Our markets started the calendar year with decent gains with mixed signals. The beginning was optimistic as Nifty gradually marched towards 18,200 levels after the flat start. After that, it oscillated in a range and finally settled around its upper band to close near the 18200 level. Meanwhile, the continued buoyancy in metals and select PSU banks coupled with a surge in real estate and NBFC counts kept participants on their toes. Volumes on the NSE remained low as some participants are still on vacation. Metals stocks rose as a foreign brokerage firm turned bullish on metals stocks due to the easing of Covid restrictions in China. The smallcap index outperformed the Nifty, although the pre-decrease ratio rose to 2.1:1. Global equities broadly rallied on the first day of trading in 2023 amid low volumes as traders evaluated cheaper valuations after last year's plunge. The market ended higher on January 2nd, the first trading session of 2023, with Nifty sitting around 18200. At the close, the Sensex was up 327 points to 61167 and the Nifty was up 92 points to 18197. US stock markets will remain closed on Monday for the Lunar New Year holiday. We expect 2023 to be a year for stock buying as we believe much of the global recession is already priced in the market. The Nifty has seen a short-term consolidation in recent sessions. On the upside, a rising trendline and major daily moving averages act as resistance, while the 20-week moving average and 50% retracement of the Sept Dec 2022 rally on the downside provide support. Markets could face sharp bouts of volatility as investors prepare for the earnings season and the upcoming Union budget. Technically, the Nifty consolidates between 18,050 and 18,250 levels. For the bulls, 18250 would be the new breakout level to watch out for and above that it could rally to 18350-18400. On the upside, there is a strong possibility of a quick intraday correction below 18,100. Below that, the index could slip as low as 18,050-18,000.
Resistance: 18250, 18350, 18450
Support: 18200, 18150, 18050
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