Domestic benchmarks are expected to open lower on Wednesday amid mixed global cues. Overnight, the US stocks slipped on weak economic data that triggered fears of recession, and a weak growth outlook from companies.
Today, being the settlement day for January derivative contracts in the NSE segment, traders expect volatility to continue. Besides, the rollout of T+1 settlement from Friday (market is closed on Thursday on account of Republic Day), to keep market downbeat.
The S&P Global’s Flash Composite Output index in the US rose to 46.6 in December, official data showed. A reading below 50 indicates contraction in business activity, and increases the possibility of a near-term recession in the world’s largest economy.
Day Trading Guide for January 25, 2023
Here are the key intraday supports and resistances to watch out for Nifty Futures, RIL, ONGC, TCS, Infosys, HDFC Bank, SBI, and ITC
The US stocks ended mostly lower with S&P 500 and Nasdaq Composite logging losses of 0.7 per cent and 0.27 per cent, respectively, while Dow Jones Industrial Average edged up 0.3 per cent.
SGX Nifty at 18,097 indicates weak opening for the market. However, analysts expect the market to remain in consolidation mode. On the other hand, most of the Asian stocks are up in early deal on Wednesday. Nifty Feb futures on Tuesday closed at 18,212 while Jan futures at 18,128.
Chandan Taparia, Head – Derivatives & Technical Research, Motilal Oswal FInancial Services Ltd, said: “We believe that this consolidation may end soon and a decisive hold of 18181-18250 zones could attract the fresh leg of rally towards 18442 then 18881 levels if the upcoming Budget supports the market sentiment.”
“India VIX (volatility index) has been falling for the last few weeks and now hovering near to 14 zones,” he said and added: “Lower VIX ahead of the Budget doesn’t indicate any major swing or fear in the market at present. juncture. Till VIX doesn’t surpass beyond 16-17 zones, this market may attract buying on decline period.”
Today’s Pick: Sonata Software (₹625.50): BUY
As long as the Sonata Software stock trades above ₹600, the outlook will remain bullish
Analysts expect stock specific action to continue due to Q3 results.
Mitul Shah—Head of Research at Reliance Securities, said: “The earnings season is in full swing and markets are closely following the management commentary. So far, the Q3 FY23 results suggest increased revenue growth with some pressure on the margin front.”
In the run-up to the Union Budget 2023, sector and stock-specific movements are expected in the market, he added..