Nifty under pressure as it flirts with 19,000 as global cues weigh

The stock market commenced its trading day with a bearish note, as both the benchmark indices, Sensex and Nifty, registered a downward opening in the red.

The Sensex opened 141.00 points down, commencing the day at 63,809.35. Similarly, the Nifty started with a decline of 13.40 points, opening at 19,070.30. Within the Nifty index, there were 37 advances, 12 declines, and 1 remained unchanged, depicting a mixed start to the day.

Among the Nifty companies, Bajaj Auto, LT, Dr Reddy, Cipla, and SBI Life were the notable gainers at the market opening. In contrast, Bharti Airtel, HDFC Bank, Axis Bank, Hindalco, and JSW Steel faced declines, marking them as the top losers early in the trading session.

Varun Aggarwal, founder and managing director, Profit Idea, said, "Asian markets soared up to 2 % (Japan Index) and US markets advance over 0.5 % ahead of the Federal Reserve's interest rat per e decision to be released today (India impact tomorrow) and Bank of Japan kept interest rate unchanged on Tuesday. US Vix declined sharply by 10 % to 18 level after announcing good quarterly results and US consumer confidence dropped to a five-month low in October".

Global market dynamics played a pivotal role in shaping the early market sentiment. Asian markets experienced substantial gains, with the Japan Index soaring up to 2 %.

Meanwhile, U.S. markets advanced by over 0.5 % in anticipation of the Federal Reserve's interest rate decision, scheduled for today, with implications for the Indian market tomorrow. On Tuesday, the Bank of Japan maintained its interest rates.

Aggarwal said, "Nifty opened flat. Expect a bound market today ahead of the US Fed rate decision outcome today. Expects positive for airline stocks after the government cut ATF prices. Currently, Dow Fut is trading -0.2 % lower, ahead of the US Fed interest rate decision. European indices yesterday, gained upto 1 %, as EU inflation fell to a 2-year low of 2.9 % in October. Yesterday Domestic equity fell after two days of gains on the back of weak Chinese manufacturing data and cautiousness ahead of the US Fed meeting. Nifty closed with a loss of 61 points at 19080 levels. FIIs: -Rs696 crore DIIs: +Rs340 crore".

The U.S. VIX witnessed a significant decline of 10 % to reach a level of 18 after announcing favourable quarterly results, while U.S. consumer confidence dipped to a five-month low in October.

Nifty's opening was relatively flat, with expectations of a range-bound market throughout the day, as investors eagerly awaited the outcome of the U.S. Fed's rate decision. The aviation sector was expected to show positivity after the government's reduction in ATF (Aviation Turbine Fuel) prices. Dow Futures were trading approximately -0.2 % lower in anticipation of the U.S. Fed's interest rate decision.

European indices recorded gains of up to 1 % on the previous day as European Union inflation fell to a two-year low of 2.9 % in October. However, domestic equity markets experienced a downturn after two consecutive days of gains, influenced by weak Chinese manufacturing data and cautiousness ahead of the U.S. Federal Reserve meeting. The Nifty closed with a loss of 61 points at the 19,080 level.

In terms of foreign institutional investments (FIIs) and domestic institutional investments (DIIs), FIIs witnessed an outflow of -Rs 696 crore, while DIIs recorded an inflow of +Rs 340 crore.

"We remain positively biased on Indian Economy. Expect India to outperform global markets. On the sectoral front, we remain positive on IT, Pharma, Metal, Banking & Petrochemical sector", Aggarwal stated.

He added, "On the weekly front, Maximum Call OI is at 19500 then 19400 strike while Maximum Put OI is at 19000 strike. Option data suggests a broader trading range between 18800 to 19600 zones while an immediate trading range is between 19000 to 19400 zones. Traders should trade cautiously with risk-defined strategies. Every dip is a golden opportunity for medium to long-term investors. The medium target for Nifty remains 20466-21234".

Despite the initial market challenges, the outlook for the Indian economy remained positive. Market experts anticipate India to outperform global markets, with a positive bias toward the IT, Pharma, Metal, Banking, and Petrochemical sectors.

On the weekly front, the Maximum Call Open Interest (OI) was at the 19500 and 19400 strike prices, while the Maximum Put OI was concentrated at the 19000 strike.

Options data suggests a broader trading range between 18800 and 19600, with an immediate trading range of 19000 to 19400. Traders were advised to approach the market cautiously with well-defined risk strategies, and long-term investors saw every dip as a golden opportunity. The medium target for Nifty remained in the range of 20466-21234.