Markets take a U-turn, majority of sectoral indices trade in red!

Market Update at 10:33 AM: The Indian benchmark indices witnessed a buoyant start on Tuesday and thereafter, extended their initial gains.  

However, in the past half an hour of trade, profit booking emerged, and consequently, the benchmark indices slipped into negative terrain. Nifty has lost almost 80 points from the high of the day as India (MAY) Nikkei Markit Manufacturing PMI came in at an actual 50.8 vs 55.5 previous and estimates of 52.   

 The majority of the sectoral indices were trading in red, led by Nifty Metal and Nifty Realty. On the other hand, Nifty Media and Nifty Auto emerged as the top gainers.  

Pre-Market Update: What a fine start to the week! The bulls kicked off the fresh week on a buoyant note and Nifty recorded fresh all-time highs as for the first time in history, it settled above the 15,550 mark.  

However, the initial hour of the trade was wobbly as Nifty made a low of 15,374; thereafter, it went from strength to strength and marked its fresh closing high for the third day in a row. This was led by the big boys of D-Street as Reliance Industries, ICICI Bank and HDFC Bank combinedly contributed nearly 95 points to Nifty kitty. Interestingly, India VIX collapsed about 3 per cent and slipped below the level of 17, the volatility remains as one of its lowest levels of the recent past.  

The price action of the day formed a sizeable bullish candle and as a result, it negated the repercussion of indecisive candle, which was formed in the prior trading session. The bulls are on a song after witnessing a breakout of the broad range 14,150-15,050 and it’s likely that Nifty may achieve its target as defined by the depth of the pattern, which comes around 15,900-15,950 levels in the medium term. Options data also echoes that the current rally could extend in Nifty as heavy put option writing was seen on Monday. Nifty 15,500 Put option saw the addition of about 23.61 lakh shares in the open interest while 15,400 put option witnessed an addition of over 20 lakh shares in the open interest. Interestingly, the 15,500 Call option, which had the second-highest concentration of open interest at the start of the trading session, witnessed the unwinding of 2.79 lakh shares. With this, the second-highest open interest on the Call side stands at a 15,700-strike price. Hence, the level of 15,700 could act as a hurdle for the bulls. On the downside, the level of 15,500 is likely to offer immediate support in case of profit booking.   

Meanwhile, significant economic data was released soon after Monday's market closing. India’s gross domestic product (GDP) contracted by 7.3 per cent in FY21 while GDP for January-March quarter (Q4) grew by 1.6 per cent. Statistically, it is the first yearly economic contraction in decades, but it is better than most estimates. Furthermore, on Monday, both FII & DII were the net buyers of equities worth Rs 2,412.39 crore and Rs 179.78 crore, respectively.