Will Indian Stock Markets Be Under Pressure When They Open On Monday?

Indian stock markets are likely to be under pressure when they open on Monday. Both BSE and NSE were closed for trading on Thursday and Friday due to public holidays. Most Asian markets were in the red today after a negative lead from Wall Street. Apart from worries about surging inflation, the continuing Ukraine-Russia war has added to the uncertainty about the global economic recovery from the Covid-19 pandemic. European and US markets are closed today.

Indian stock market benchmark NSE Nifty 50 index on Wednesday closed 0.31% down at 17,475.65 and the S&P BSE Sensex fell 0.41% to 58,338.93. The 10-year benchmark bond yield ended at 7.2148%, while the rupee settled at 76.1750 to the dollar.

“Indian markets will react to two major earnings ie Infosys and HDFC bank on Monday ie April 18. Besides, any major development on the global front would also impact the sentiment. On the index front, Nifty is currently respecting the first line of defense ie 20 EMA on the daily chart around 17,400 and its breakdown can push the index to the 17,250 zone. In case of a rebound, the 17,650-17,750 zone would act as immediate hurdle,” said Ajit Mishra, VP – Research, Religare Broking Ltd.

HDFC Bank announces its earnings on Saturday (16 April 2022). Infosys, which announced earnings after market hours on Wednesday, gave a sales forecast that trailed analyst estimates. Revenue this fiscal year ending in March 2023 will increase 13% to 15% in constant currency terms, lagging the 17% growth analyst had projected on average. The stock slid sharply in New York trading.

Nifty futures trading on Singapore exchange (SGX Nifty) was down at 17,301, amid weak global cues.

Central banks in several major economies including the United States, Canada and Britain have already started raising interest rates to contain prices, but the European Central Bank on Thursday kept its stimulus plans and rates unchanged. Analysts had expected China’s central bank to cut interest rates on Friday to provide support to the Covid-stricken economy. But the People’s Bank of China left them unchanged.

Russia is a major global oil and gas supplier, and — along with Ukraine — is also a key player in the grain sector. The conflict has shaken markets for these commodities. The war has sent oil prices soaring, with reports swirling about further energy sanctions on Russia.

“On a weekly chart, the index has formed an evening star candlestick pattern, indicating bearishness. After the highs of October 2021, a lower top lower bottom pattern has been forming on the benchmark index. The broader indices also have a similar trend and the overall structure of the market has been shifting to the bearish side. A decisive fall below 17,450 levels can lead to a retest of 16,900 zone. Thus, traders should maintain a mild bearish outlook going into the next week. A move above the immediate resistance level of 17,850 can negate the bearish outlook,” said Yesha Shah, Head of Equity Research, Samco Securities.

“As earnings season gathers pace, D-street will be eyeing quarterly results to gauge the future trajectory of Mr. Market. BFSI as well as IT companies will be in limelight as market players decode results and management commentary of a slew of companies in these sectors. As no major global or domestic macroeconomic events are expected next week, stock-specific movements will be more pronounced and whipsaw movements can be witnessed as a result of earnings hits and misses,” she added.

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