Trade Setup: Top 15 things to know before market opens on May 18, 2022
- Sensex rose 1344.63 points or 2.54% to 54,318.47 and Nifty was up by 417.00 points or 2.63% to 16,259.30
- Nifty or India VIX fell 7.28% to 22.74 on Tuesday
- The trends on SGX Nifty indicate a negative opening for the index in India
Tuesday was a fantastic trading day for Dalal Street, with both the Sensex and Nifty finishing with gains of more than 2% each, recapturing their critical 54,300 (Sensex) and 16,250 (Nifty) levels.
The Nifty50 has formed a long bullish candle on the daily chart in a broadly positive signal for the short term, according to Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities.
He sees 16,150 as the trend deciding level for traders, above which, the positive momentum is likely to continue till 16,380-16,450-odd levels in his view. However, in case the index slides below that level, some quick intraday correction will be on the cards making it retest 16,080-16,050 levels, he said.
Sensex rose 1344.63 points or 2.54% to 54,318.47 and Nifty was up by 417.00 points or 2.63% to 16,259.30 in the previous session. Sensex touched a high and low of 54,399.42 and 53,176.02, respectively. All 30 stocks advanced on the index. Nifty traded in a range of 16,284.25 and 15,900.80. All 50 stocks advanced on the index.
The broader indices ended in green with the BSE Midcap index rising 2.51%, while the Small cap index was up by 2.78%. The top gaining sectoral indices on the BSE were Metal up by 7.62%, Basic Materials up by 4.26%, Energy up by 4.13%, Oil & Gas up by 3.52% and Telecom up by 3.31%, while there were no losing sectoral indices on the BSE.
India VIX Index
Nifty or India VIX, a gauge of the market's expectation of volatility over the near term, fell 7.28% to 22.74 on Tuesday.
The trends on SGX Nifty indicate a flat opening for the index in India with a 1-point gain. The Nifty futures were trading at 16,256.50 on the Singaporean Exchange around 06:40 hours IST.
Support and Resistance levels
The key support level for the Nifty is placed at 16,012, followed by 15,765. If the index moves up, the key resistance levels to watch out for are 16,395 and 16,532, according to pivot charts.
The S&P 500 rose 80.84 points, or 2%, to 4,088.85.
The Dow Jones Industrial Average rose 431.17 points, or 1.3%, to 32,654.59.
The Nasdaq rose 321.73 points, or 2.8%, to 11,984.52.
The Russell 2000 index of smaller companies rose 56.87 points, or 3.2%, to 1,840.30.
Asian markets finished broadly higher yesterday with shares in Hong Kong leading the region. The Hang Seng was up 3.27% while China's Shanghai Composite was up 0.65% and Japan's Nikkei 225 was up 0.42%.
European markets finished broadly higher yesterday with shares in Germany leading the region. The DAX was up 1.59% while France's CAC 40 was up 1.30% and London's FTSE 100 was up 0.72%.
Major News Headlines
Shares of Life Insurance Corporation of India (LIC) made a drab market debut on Tuesday, with the stock listing at Rs 872 each on the NSE, a discount of about 8% from its IPO issue price of Rs 949 per share. LIC shares began trading on the BSE at Rs 867. The shares climbed to Rs 886 per share in early trading but remained below the issue price. According to stock market analysts, allottees who applied for listing gains can hold the stock with a stop loss at Rs 800, while new investors can continue to acquire LIC shares in a measured way with a stop loss of around Rs 735 per share levels. Following a successful initial public offering that netted the government Rs 20,557 crore, LIC set the issue price of its shares at Rs 949 per share. The LIC IPO, India's largest to date, ended with approximately three times subscription, primarily from retail and institutional investors, while foreign investor participation remained low.
India’s inflation based on the Wholesale Price Index (WPI) rose to 15.08% in April, according to data released by the Ministry of Commerce & Industry on May 17. The WPI inflation grew 14.55% during March, while the WPI for February was revised to 13.11% from 13.43%, the data showed. The WPI inflation was 10.74% in April 2021. The WPI inflation has extended its stay in double-digit territory for the 13th consecutive month starting from April 2021. The food articles segment saw a rise of 8.35% in April, the data showed. In March, this was 8.06%. The marginal month-on-month rise can be attributed to a rise in vegetable prices. Vegetable prices surged 23.24% in April, against a rise of 19.88% in March, the data showed. Prices of potatoes rose 19.84% while that of onions slipped (-)4.02%. The prices of fruits witnessed a spike of 10.89% last month from 10.62% in March, while that of wheat slipped to 10.70% from 14.04% a month ago. Eggs, meat and fish prices eased to 4.50% in April from 9.42% in March and cereals rose 7.80% last month as compared with 8.12% in March.
Capital markets regulator Securities Exchange Board of India (SEBI) has approved the Initial Public Offerings (IPOs) of three companies including Federal Bank’s subsidiary Fedbank Financial Services, airport service aggregator platform Dreamfolks Services and speciality marine chemical manufacturer Archean Chemical Industries. These companies filed their preliminary IPO papers with SEBI in January and February and received an observation letter from the regulator during May 9-13, according to an update with the SEBI shown on Tuesday. In SEBI’s language, observation means the company concerned has received the approval to launch the IPO.
The Securities & Exchange Board of India (SEBI) has suggested that no 'prominent public figures, including celebrities and sportsmen,' should endorse crypto products. The market regulator proposed that companies promoting cryptos and digital assets should also put up disclosures listing possible law violations. In April, SEBI clarified its position on the matter with India’s Parliamentary Standing Committee on Finance when members asked questions on various aspects of crypto. As a result, the market regulator submitted a detailed written response to the Parliamentary Panel. The Advertising Standards Council of India (ASCI) issued crypto advertising guidelines in February and the Ministry of Finance had urged the SEBI to share its stance on such ads. The market regulator also said that prominent public figures should be held responsible for making such endorsements which is a possible violation of the Consumer Protection Act or any other law. According to the ASCI guidelines, all ads should carry a disclaimer saying, "Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions". Such a disclaimer should be made in the following manner so that it is prominent and unmissable by an average consumer, said the advertising watchdog.
MIKER FINANCIAL CONSULTANTS PVT LTD sold 45,000 shares in AAA Technologies Limited at Rs 71.20 per share on the NSE.
ALPHA LEON ENTERPRISES LLP bought 2,21,823 shares in Agro Phos India Limited at Rs 48.25 per share on the NSE.
INDUSIND BANK LTD CLIENT A/C sold 22,00,000 shares in Birla Tyres Limited at Rs 9.95 per share on the NSE.
PMK HOLDINGS PRIVATE LIMITED HOLDINGS PRIVATE sold 3,99,184 shares in Cigniti Technologies Limited at Rs 358.36 per share on the NSE.
VISHESH GUPTA sold 70,00,000 shares in Integra Essentia Limited at Rs 0.15 per share on the NSE.
HARSHIL PREMJIBHAI KANANI sold 5,14,305 shares in Kanani Industries Limited at Rs 37.08 per share on the NSE.
AFFILADO EDUCATION SYSTEM LLP sold 1,13,095 shares in Sakar Healthcare Limited at Rs 130.01 per share on the NSE.
GOENKA BUSINESS & FINANCE LIMITED sold 1,38,000 shares in Sonu Infratech Limited at Rs 34.00 per share on the NSE.
Foreign institutional investors (FIIs) sold shares worth a net Rs 2,192.44 crore, while domestic institutional investors (DIIs) bought shares worth a net Rs 2,294.42 crore in the Indian equity market on May 17, as per provisional data available on the NSE.
GNFC, Indiabulls Housing Finance, and Punjab National Bank are under the F&O ban for May 18. Securities in the ban period under the F&O segment include companies in which the security has crossed 95% of the market-wide position limit.