Stock Market News: The domestic benchmark indices, the Sensex and Nifty 50, began on Wednesday with minimal movement as advances in information technology companies were offset by widespread profit booking following data on US producer prices that indicated inflation was slowing down.
The Nifty 50 index remained flatat 24,132.30 as of 9:53 IST, and the Sensex was trading level at 78,935.31.
After data revealed that US producer prices increased less than anticipated in July, indicating a slowdown in inflation, the IT index increased by 0.6%. The next big data point that investors will be eagerly watching is the US consumer pricing data for July, which is scheduled to be released after Indian market hours.
The US PPI inflation figures show a weakening of inflation, according to Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. The CPI figures that are released today will probably corroborate this falling trend. In anticipation of this and a September rate decrease by the Fed, the US market rose yesterday. In the event of a 50 basis point rate drop, the US market will continue to be strong, supporting international markets. This is the most likely situation.
Nifty 50 continues to face supply at the previous resistance zone of 24,500 odd, while the index has given a breakdown of a bearish flag pattern on hourly charts. This being clubbed with a close below its previous day’s low in Tuesday’s session is likely to further up the pressure on daily charts as well.
Charts suggest that ongoing time correction is likely to turn into price correction until Nifty 50 meets its rising channel support at 23,700 odd. This support was seen at 23,650 until last week but has now shifted higher. This channel has been in existence for the past 7 months now. The index is likely to unfold up to 23,700 odd with a pause at its 50-day EMA which stands at 24,000 levels.
Bank Nifty as well has closed below its previous day’s low. All of the recovery witnessed in past week has been given away in Tuesday’s session. Yet unless a close below 49,400 is not seen, a significant downside does not open up on the index. This level of 49,400 coincides with a 10-month rising trendline on which the index has taken support multiple times. Minor upside to 50,000 odd are likely to get sold into for 49,700/49,450 on the downside.
On top stock recommendations for Wednesday, Sagar Doshi has recommended three stocks:
The stock has been hanging above its 200 DMA after its breakout above the same in June 2024. Previous resistance of 200 DMA has now been acting as support and stock has been consolidating for the past 8 weeks now. A fresh pole and flag pattern breakout is spotted on daily charts indicating a resumption of uptrend for Aether Industries for a 7-9% follow-up move on the upside.
A higher high formation is been seen on charts of Piramal Enterprises post 2-year falling trendline breakout. Rising momentum and short covering post breakout suggest a bear trend to end in the coming days. Short-term chart also shows inverse head and shoulder suggest the stock is ready for the next bull cycle.
Charts of HAL have seen a breakdown since the start of this calendar month, however, no follow-up move has unfolded so far for the same. On studying lower time frames, the hourly charts are undergoing a bearish flag unfolding pattern which hints at further downside, Added to this, in the past 2 weeks, HAL has been rejected from its supply zone thrice which suggests that the upside is capped for now on this script. An 8-10% follow-up move on downside could unfold on this structure for HAL.
Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.
