Global financial markets are navigating a phase of heightened caution as uncertainty over the trajectory of US interest rates continues to loom large. Mixed signals from recent US employment data and stagnant retail sales growth have subdued risk appetite among investors worldwide. This sentiment was reflected on Wall Street, where the S&P 500 and Dow Jones Industrial Average closed in the red, though the Nasdaq Composite managed to eke out a marginal gain.
Asian Markets and Domestic Headwinds
In early trading hours, Asian markets presented a mixed picture. Investors are adopting a guarded stance, awaiting crucial policy cues, including a potential interest rate hike by the Bank of Japan later this week. Back home on Dalal Street, Indian equities are contending with specific near-term challenges.
Persistent selling by Foreign Institutional Investors (FIIs) and ongoing weakness in the Indian rupee are acting as significant headwinds. These factors are further compounded by delays in concluding the trade deal negotiations between India and the United States. However, the market continues to draw substantial support from steady domestic inflows channeled through Systematic Investment Plans (SIPs) and insurance investments, providing a crucial structural buffer against deeper declines.
While India's long-term economic growth story remains firmly intact, the near-term direction for equities is likely to be dictated by global cues, currency fluctuations, and year-end portfolio adjustments. This environment is fostering a cautious and highly selective approach among market participants.
Technical Outlook: Nifty 50 and Bank Nifty
Analyzing the benchmark indices, Ponmudi R, CEO of Enrich Money, provided a detailed technical perspective. He noted that the short-term trend for the Nifty 50 has turned from neutral to mildly bearish after the index slipped below its 20-day Exponential Moving Average (EMA) at 25,950, which now acts as immediate resistance.
The immediate focus shifts to the 25,700–25,800 support band, which has emerged as a strong demand zone in recent sessions. This level is reinforced by the 50-day EMA, currently near 25,763, and a key downside trendline, making it a critical area to watch. Momentum indicators like the Relative Strength Index (RSI), hovering near 48, reflect a softening bias but not oversold conditions.
"As long as this area holds, further downside is likely to remain contained," stated Ponmudi. On the upside, the 26,000–26,100 zone continues to pose stiff resistance, where any rebounds may attract selling pressure. A sustained move above 26,000 would be needed to neutralize the current corrective bias.
For the Bank Nifty, the short-term structure has weakened after the index closed below its 20-day EMA near 59,120. The RSI has cooled to around 52, indicating a phase of consolidation or mild downside risk. Immediate support is seen in the 58,800–59,000 zone, backed by notable put writing at 58,800. The 59,500–60,000 range remains a key resistance area with significant call writing.
Rupee Dynamics and Export Advantage
Discussing the Indian rupee's movement to record lows against the US dollar, Sachin Sawrikar, Founder and Managing Partner at Artha Bharat, attributed the pressure primarily to global factors. A robust US dollar, bolstered by expectations of higher-for-longer US interest rates and safe-haven flows, has weighed on emerging market currencies across the board.
Sawrikar highlighted that peers like the Japanese Yen have weakened over 10% year-on-year, while currencies such as the Korean Won and Indonesian Rupiah have seen mid-to-high single-digit depreciations. In this context, the rupee's decline has been relatively orderly. He also pointed out that a weaker rupee enhances the competitiveness of Indian exporters in sectors like IT services, pharmaceuticals, and manufacturing, potentially boosting export earnings.
Expert Stock Recommendations for Today
Market experts have identified several trading opportunities based on technical analysis. Here are eight intraday stock picks recommended for today:
Sumeet Bagadia, Executive Director at Choice Broking:
AIIL: Buy at ₹2,800, target ₹3,000, stop loss ₹2,700. The stock shows trend resumption signs after a correction, finding strong support at the 200-day EMA.
Titan: Buy at ₹3,930, target ₹4,190, stop loss ₹3,800. The stock is gaining upward momentum after a pullback, trading above all major EMAs with a bullish structure.
Ganesh Dongre, Senior Manager of Technical Research at Anand Rathi:
Sudeep Pharma: Buy at ₹662, target ₹690, stop loss ₹640. Exhibiting a strong bullish pattern with solid support at ₹640.
PG Electroplast: Buy at ₹570, target ₹590, stop loss ₹560. Shows a notable bullish pattern with support at ₹560.
NTPC: Buy at ₹321, target ₹330, stop loss ₹315. Displays a strong bullish pattern, maintaining support at ₹315.
Shiju Kuthupalakkal, Senior Manager of Technical Research at Prabhudas Lilladher:
Rallis India: Buy at ₹269.90, target ₹285, stop loss ₹264. Indicates a decent pullback from lows with improving bias and rising volume.
Astral: Buy at ₹1,462, target ₹1,525, stop loss ₹1,430. Picked up well from the 200-period MA, moving past the 50-EMA level.
Dishman Carbogen: Buy at ₹230.60, target ₹244, stop loss ₹225. Shows signs of bottoming out near ₹216 with a positive trend reversal on the RSI.
In summary, while global uncertainty and domestic FII outflows are testing investor sentiment, robust domestic inflows and key technical supports are providing a floor to the market. Traders are advised to monitor the identified support and resistance levels closely and consider the recommended stocks with strict risk management protocols in place.
