Concerns arise over data related to stress tests for mutual funds. NIFTY set to open with minimal changes – Pre-Market Analysis Report


Yesterday’s Analysis

Yesterday, Friday, the NIFTY began at 22,074 with a gap-down. It continued to move until reaching the week’s low of 21,920, but then stabilised and rebounded. The day concluded with NIFTY closing at 22,023, experiencing a decline of 123 points or 0.56%.

The U.S. markets ended the day with losses. The European markets ended the day with a combination of gains and losses.

Today’s Expectation

Asian markets are experiencing a variety of trading outcomes. Japan has risen by 2% in anticipation of its upcoming interest rate decision.

The U.S. Futures are experiencing minimal movement.

GIFT NIFTY is currently trading slightly lower at 22,070.

Based on the various factors, it appears that the market will open flat or with a gap-down.

The NIFTY has several support levels at different price points. There are potential resistances at 22,090, 22,200, and 22,300.

BANKNIFTY has support levels at 46,470, 46,240, and 46,000. There are several resistance levels to watch out for at 46,700, 46,980, 47,200, and 47,420.

Foreign Institutional Investors purchased shares worth Rs 848 crores. Shares worth Rs -682 crores were net-sold by Domestic Institutional Investors.

The INDIA VIX remains steady at 13.69.

As the market opens today, it is entering a completely new landscape. A world where election dates have been officially declared.

Despite initial expectations for completion in May, the date for the counting process has been rescheduled to June 4. In June, speculators would become more active.

Last Friday, NIFTY traded within the anticipated range. No breakdown below 21,920 was observed. Even now, the range to keep an eye on is 21,920-22,200.

Wednesday’s interest rate decision from the FOMC meeting of the U.S. is anticipated to have a significant impact on the market. Given the timing, NIFTY options are expected to experience increased volatility overnight.

Keep an eye on the higher levels for BANKNIFTY, specifically around 46,000-47,000. The options data suggests the same conclusion.

The stress test data for the mutual funds that SEBI requested appears to be rather unfavourable. It revealed that significant smallcap funds would require a considerable amount of time to sell off their holdings in the event of investor withdrawals. There could be a potential wave of corrections and regulations in the smallcap and midcap sector.

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