Bearishness to Continue? - Post-Market Analysis

Post-market analysis for Aug 11, 2023:

NIFTY started the day at 19,554 with a gap-up of 11 points. The index made a nearly 70-point red candle at opening (crossing yesterday’s low and the round level support of 19,500) and made lower lows to hit 19,440 levels. At 1 PM, the index made a sharp rebound of 40 points in a single candle but couldn’t sustain it as the selling pressure kicked in. Then, the index continued the fall to breach the day’s low. Nifty closed at 19,428, down by 114 points or 0.59% 

BANK NIFTY (BNF) started the day at 44,568 with a small gap-up of 26 points. Bank Nifty fell 250 points in the first 5min itself (breaching the important support zone of 44,500) and fell to 44,270 levels. The index then consolidated within a 150-point range with volatility and broke down from the consolidation at 3 PM. BNF closed at 44,199, down by 342 points or 0.77%. 

All indices except Nifty PSU Bank (+1.25%) closed in red. Nifty Media (-1.8%) fell the most. 

Major Asian markets closed mixed (the Chinese market fell 2%). European markets are currently trading in the red.

Today’s Moves

HCL Tech (+3.2%) was NIFTY50’s top gainer. The IT major announced a global strategic partnership with Verizon for managed network services.

Indian Overseas Bank (+13.36%) rallied after CARE Ratings assigned a fresh rating of CARE A1+ to the bank's proposed certificate of deposits of ₹10,000 crore.

Kalyan Jewellers (+11.5%) jumped after HSBC raised its target price for the jewellery stock after the company posted its Q1 earnings.

IndusInd Bank (-2.3%) was NIFTY50’s top loser.

Apollo Tyres (-8.2%) crashed after the company reported lower-than-expected revenue growth in Q1.

Alkem Labs (-7.7%) fell sharply after the company reduced its India business revenue growth forecast to "high single-digit" from low double digits for FY24. BofA sees a downside of 15% to ₹3,500 for the stock.

Markets Ahead

The Indian markets are still looking very weak.

Nifty: The index has closed near the support zone of 19,420. So if there’s a flat or gap down opening on Monday, the index can further fall to 19,360 and 19,300 eventually. The important resistance level to watch out for is 19,500.

Nifty has filled the gap created near 19,420 levels and has taken support. So the index might move back up from here or take a pause. If the fall continues, then the levels mentioned above could be achieved.

Bank Nifty: The immediate support for the index can be 44,200 levels, and the major resistance will be 44,500 levels. But Bank Nifty is in a volatile zone between 44,500 and 43,400. So as long as the index is in this zone, there can be movements happening on both sides.

Monday’s opening will be crucial. If there’s a flat opening and selling continues or if it’s a gap-down opening, both indices may continue to fall.

The inflation rate in the US climbed 3.2% YoY in July, as compared to analyst expectations of 3.3%. This data is the key metric the US Federal Reserve will consider in deciding whether to continue raising interest rates. On the other hand, India's industrial production fell to 3.7% in June 2023, compared to 5.3% in May 2022 and 12.6% in June 2022.

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