Powell noted that “nearly all” participants of the FOMC expected further rate increases would be appropriate by the end of the year, saying, “Inflation pressures continue to run high, and the process of getting inflation back down to 2% has a long way to go.”
Read here: Fed Chair Powell signals higher interest rates, says inflation fight ‘has a long way to go’
On the domestic side, the benchmark equity indices ended at record closing highs on Wednesday, led by gains in heavyweights among banking and IT sectors. The Sensex ended 195.54 points, or 0.31%, higher at 63,523.15, while the Nifty settled at 18,856.85, up 40.15 points, or 0.21%.
Asian markets traded mixed, while the trends on SGX Nifty indicate a flat-to-negative start for the broader index in India. The Nifty futures were trading 42.5 points, or 0.22%, lower at 18866.5 on the Singaporean Exchange.
Read here: Global market: SGX Nifty to Powell’s comments on interest rate hikes – key triggers for Indian stock market
“Despite hitting record highs, the domestic market failed to sustain its upward trajectory due to prevailing concerns over global issues and a delayed monsoon. Furthermore, market volatility was exacerbated by consecutive days of net selling by FIIs, while mid-cap stocks maintained their steady gains,” said Vinod Nair, Head of Research at Geojit Financial Services.
Meanwhile, foreign institutional investors (FIIs) made a strong buying of ₹4,013.10 crore on Wednesday in Indian stocks. Also, domestic institutional investors (DIIs) emerged as net buyers with an investment of over ₹550.36 crore.
On the technical front, a thin body of positive candle was formed on the daily chart with minor upper and lower shadow. This pattern indicates a high wave or doji type of candle pattern at the highs, which signal emergence of volatility at the highs, analysts said.
Also Read: Day trading guide for today: Six buy or sell stocks for Thursday — June 22
“Nifty is currently placed at the edge of moving into new all time high above 18,887 levels. The market is repeatedly making an attempt to witness an upside breakout, but was not able to succeed due to lack of strength at the hurdle,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
He believes the underlying trend of Nifty continues to be positive with range bound movement. A decisive move above 18,900 levels is expected to open the next upside towards 19,100-19,200 levels in the near term.
Nifty
Despite a largely sideways movement in Nifty on Wednesday, the index managed to stay above 18,800, which is considered as immediate support, suggesting that the overall trend remains positive.
In the short term, a crucial support level is observed at 18,700, where a substantial number of Put writers have shown their presence. This suggests that there is a significant amount of buying interest and support at that level,” said Rupak De, Senior Technical at LKP Securities.
On the higher end, a resistance level is noted at 19,000, where Call writers are waiting to defend the price level.
“This indicates that there may be selling pressure and a potential hurdle for the index to surpass. A rise above 19,000 may induce further rally in the market,” he added.
Nifty Bank
The Nifty Bank index ended 0.21% higher at 43,859.20 on Wednesday.
“The Bank Nifty index is currently witnessing a continued battle between the bulls and the bears. It has a support level at 43,500, which is indicated by the presence of maximum put writing. On the other hand, there is resistance at 44,000Ce, where the highest open interest is seen on the call side,” said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.
He expects a break on either side of this range to result in trending moves. Within the range, it is advisable to adopt a buy-on-dip approach, he added.
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Disclaimer: The views and recommendations given in this article are those of individual analysts and brokerage firms. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 22 Jun 2023, 08:29 AM IST