Key Concepts
- US Market Performance (NASDAQ, S&P 500)
- Nvidia Results Impact
- Asian Market Trends (Hong Kong, China, South Korea, Japan)
- GIF Nifty Performance and FIA Activity
- IT and Banking Sector Influence
- Government Stabilization Measures
- Nifty Monthly Expiry Volatility
- FIA Selling Trends (January & February)
- Nifty's Consecutive Monthly Decline
- Technical Market Outlook (Bearish)
- Nifty Support Levels and Expiry Range
US Market and Nvidia's Influence
The US markets closed negatively yesterday, but NASDAQ and S&P 500 showed positive movement after market hours. Nvidia's results were in line with market expectations, leading to a relatively flat S&P 500 futures market with a slight positive bias.
Asian Market Overview
Asian markets are mixed, with Hong Kong and China showing gains, while South Korea and Japan are experiencing declines.
GIF Nifty and FIA Activity
GIF Nifty showed an initial surge of 100 points, indicating positive momentum in the Indian market. However, it later declined, resulting in an almost flat opening with a positive bias. FIAs have been consistently selling, and this trend continued.
Sector-Specific Influences
Infosis performed slightly better in US markets, while ICICI Bank and HDFC Bank were slightly lower. The performance of IT stocks in India is expected to be influenced by NASDAQ's stability and Nvidia's results. The banking sector's performance is uncertain, with a potential for a slight decline in Bank Nifty in the morning.
Government Measures and FIA Selling
The government is implementing measures to stabilize the market, but FIAs are using any positive movement as a selling opportunity.
Nifty Monthly Expiry
The Nifty monthly expiry is expected to be volatile, especially with a flat market opening. Short positions may be closed, potentially leading to a trending day.
Unprecedented FIA Selling and Nifty Decline
FIAs have been net sellers for almost every day in January and February, a trend only interrupted by a block deal in Bharti Airtel in February. Nifty has declined for five consecutive months, a situation not seen even during the Lehman Brothers collapse or the Coronavirus pandemic. This continuous selling by FIAs and the Nifty's decline are setting records, with some suggesting this last occurred in 1995.
Quote: "for the fifth straight month Nifty is down so for five continuous months nift is down it has not happened even during human brother collapse and Corona virus period"
Technical Outlook and Strategy
The market is considered ultra-bearish, and the recommendation is to wait for FIA selling to stop before considering long positions. Technically, both Nifty and Bank Nifty are bearish.
Market Behavior and Option Writers
Despite the drastic market fall in February, the decline was gradual, with lower highs and lower lows. This slow grinding has not caused significant damage to option writers.
Nifty Support and Expiry Range
A good support level for Nifty is considered to be 22,500. The expected range for today's expiry is between 22,500 and 22,800.
Conclusion
The market is currently facing significant selling pressure from FIAs and is technically bearish. The Nifty monthly expiry is expected to be volatile, and the recommendation is to remain cautious and wait for a change in FIA selling patterns before taking long positions. The speaker suggests focusing on the 22,500-22,800 range for the current expiry and deferring discussion of the March expiry to the following day.
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