Indian benchmark indices are likely to open on a higher note, hinted SGX Nifty. On the Singapore Exchange, Nifty futures were in the green, up 68 points, at the 17,700 level. Markets posted a strong rebound on Friday and gained over one and a half percent, tracking supportive global cues. NSE Nifty 50 ended at 17,594, up over 250 points while BSE Sensex settled at 59,808, gaining 900 points.
“The market had more reasons to cheer today than to worry about concerns regarding inflation. PSU Banks led the sectoral rally as reports of foreign investments in Adani stocks helped the sector in recouping the dampened sentiments. The sentiment was further lightened as FIIs turned in strong buyers. Positive global sentiments also played a vital role in uplifting the market, as a Fed official commented on a favourable level of rate hike in the next meeting,” said Vinod Nair, Head of Research, Geojit Financial Services.
U.S. Treasury Yields
U.S. Treasury yields eased in the wake of comments from Fed officials that calmed fears over inflation and interest rates. The U.S. 10-year Treasury yield fell to 3.960%, down from Thursday’s high of 4.091%. The two-year Treasury yield, which typically moves in step with interest rate expectations, dipped 4.3 basis points at 4.859%, according to Reuters.
Asian Markets
Stocks in Asia-Pacific were mixed on Monday. Japan’s Nikkei 225 traded up by 1.21%, and South Korea’s Kospi gained 0.52% in its first hour of trade. China’s Shanghai Composite and Shenzhen Component traded in the negative, lower by 0.34% and 0.82%, respectively. Hong Kong’s Hang Seng index traded decisively in the negative territory, losing 0.58% in trade.
Crude Oil
Oil prices rose, recovering from an early slump after Reuters reported that the United Arab Emirates is not planning an exit from the Organization of Petroleum Exporting Countries (OPEC). U.S. crude rose 2% to $79.73 per barrel and Brent was at $85.86, up 1.31% on Friday.
FII/DII Data
Foreign institutional investors (FII) bought shares worth Rs 246.24 crore, while domestic institutional investors (DII) acquired equities worth Rs 2,089.92 crore on 3 March, according to the provisional data available on the NSE.
F&O Ban
The National Stock Exchange has no stocks on its F&O ban list for 6 March. According to the NSE, stocks are prohibited in the F&O sector when they have exceeded 95% of the market-wide position limit (MWPL). During the F&O ban period, no new positions are permitted for F&O contracts in that stock.
Technical View
“A long bull candle was formed on the daily chart, which is indicating an upside breakout of the consolidation movement of the last few sessions. Friday’s up move seems to have confirmed the lower bottom reversal at 17,255-28th Feb, of the larger negative pattern of lower tops and bottoms. Presently, Nifty is in an attempt of staging an upside breakout of the initial hurdle at 17,600 levels and a move above this area could open the next upside resistance of around 17,800 levels in the near term.
“Nifty on the weekly chart formed a reasonable bullish candle with minor lower shadow. Formation of such a pattern after the sharp weakness of previous week signal chances of upside bounce for the market ahead. Immediate support is placed at 17,450 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Levels to Watch
“It will be crucial for Nifty to sustain above 17,500 level in next few days for further rally. A move till 17800 can be seen if these levels are sustained. Nifty has managed to close above 200 EMA. The highest call OI is at 17,900 strike price while on the put side, highest OI remains at 17,500 strike price,” said Ameya Ranadive, CMT,CFTe, Equity Research Analyst, Choice Broking.
Windfall Tax
The center has marginally raised windfall tax on locally produced crude oil to Rs 4400 per tonne from Rs 4350. However, the export duty on diesel was cut to Rs 0.5 per litre and the export duty for Aviation Turbine Fuel (ATF) has been scrapped.