Mutual Fund Stress Test Data Worries. NIFTY to Open Flat - Pre-Market Analysis Report

What Happened Yesterday?

NIFTY started yesterday Friday at 22,074 with a gap-down. It kept moving until the week’s low of 21,920 but formed a base and bounced back. NIFTY ended the day at 22,023, down by 123 points or 0.56%.

U.S. markets closed in the red. The European markets closed mixed.

What to Expect Today?

Asian markets are trading mixed. Japan is up 2% ahead of its interest rate decision.

The U.S. Futures are trading flat.

GIFT NIFTY is trading in slight red at 22,070.

All the factors combined indicate a flat to gap-down opening in the market.

NIFTY has supports at 21,980, 21,920, 21,800 and 21,680. We can expect resistances at 22,090, 22,200 and 22,300.

BANKNIFTY has supports at 46,470, 46,240 and 46,000. We can expect resistances at 46,700, 46,980, 47,200 and 47,420.

Foreign Institutional Investors net-bought shares worth Rs 848 crores. Domestic Institutional Investors net-sold shares worth Rs -682 crores.

INDIA VIX is flat at 13.69.

When the market opens today, it is opening to a different world. A world where election dates have been announced.

While most people thought that this process would be done by May, the day of counting is now set as June 4. Speculators in June would now start being more active.

Last Friday, NIFTY traded in the expected range. A breakdown below 21,920 was not seen. Even today, the range to watch out for would be 21,920-22,200.

On Wednesday, the interest rate decision from the FOMC meeting of the U.S. is expected to shake up the market. Since it will be Wednesday overnight, NIFTY options will be volatile.

The larger levels to watch out for BANKNIFTY would be 46,000-47,000. Options data indicates the same.

The mutual funds' stress test data that SEBI requested does not look too positive. It basically showed that major smallcap funds would take a longtime to liquidate their portfolios in case of withdrawals. We may see a fresh round of corrections and regulations in the smallcap and midcap space.

We will be continuing our NIFTY and BANKNIFTY trades today. You can check out our trades on the marketfeed app or our website!

All the best for the day!