Indian markets to open upbeat; 20-DMA on Nifty likely to act as a resistance point!

In the last trading session, we saw a tug of war between the index heavyweight Reliance Industries and the heavyweight sector i.e. Bank Nifty.

On one hand, Reliance Industries was dragging the index lower while on the other hand, Bank Nifty had put all its efforts to keep markets stay afloat. And finally, the markets ended in the green, aided by a strong move in Bank Nifty.

Early trends on SGX Nifty are indicating a cheerful opening on the back of strong global cues. SGX Nifty is up by 77 points and trading at 11,758. Watch out for the 20-DMA on Nifty, which is placed around 11,816 levels. It could act as a resistance point in the near term.   

Our view for the day is that after a cheerful opening, the markets might see a volatile move and crisscross between the 20 and 50-DMA and a trending move is only expected after the outcome of the US Presidential Election.

On the domestic front, investors would keep a close eye on corporate earnings as nearly 90 companies would report their earnings today, which include Adani Ports, Ajanta Pharma, Dabur India, Godrej Properties, PVR, and Sun Pharma.

Asian indices are in a buoyant mood after a strong close overnight on Wall Street. Hong Kong’s Hang Seng has surged 1.76 per cent to 24,890 levels while China’s Shanghai Composite has added 0.74 per cent and it is trading around 3,248 levels. Japan’s Nikkei 225 is closed for a holiday.

Nifty and Sensex might have snapped their three-day losing streak on Monday but the roller coaster ride continued on D-Street as the key benchmark indices gave away the bulk of its gains in the last leg of the trade, only to settle with modest gains.

Apart from this, all the eyes were on the crown jewel of the index i.e. ‘Reliance Industries’ as it plunged near 8.5 per cent and recorded its biggest single-day decline since March 23. On the other hand, Bank Nifty played the role of saviour as it registered gains of over 4 per cent and helped the indices to stay afloat. The broader indices too ended the day on a mixed note with Nifty Mid-Cap adding 0.40 per cent, while Nifty Small-Cap declining 1.55 per cent. 

Wall Street kicked off the busy week on an upbeat note amid enhanced US manufacturing activity in October. Dow led from the front as it jumped 1.6 per cent, followed by S&P 500, which was up by 1.2 per cent, and Nasdaq Composite adding 0.4 per cent. Meanwhile, European indices too ended the first trading session of the month on an optimistic note on the back of cheerful manufacturing data from the Eurozone.