According to experts, for the Nifty, resistance is observed at 22,125, with further resistance lying within the range of 21,800 to 21,600.
On February 19, the benchmark Sensex and Nifty opened higher, buoyed by gains in pharmaceutical and energy sectors. At 09:20 am, the Sensex rose by 90.34 points or 0.12 percent to 72,517, while the Nifty climbed by 51.70 points or 0.23 percent to 22,092.
In morning trading, 2,156 shares advanced, 671 declined, and 112 remained unchanged. The broader market also saw an uptick, with the BSE midcap and smallcap indices rising by 0.5 percent and 0.8 percent, respectively.
Sector-wise, Nifty Pharma led the gains with a nearly 1 percent rise, followed by Nifty Energy, which gained 0.7 percent. Apart from Nifty IT, which dipped by half a percent, all other NSE sectoral indices traded higher.
The surge in US bond yields, driven by higher-than-expected consumer price inflation, has prompted sustained selling by foreign portfolio investors (FPIs) in the cash market. Until February 16, foreign investors offloaded equities worth Rs 6,112 crore, but purchases in the primary market and other avenues reduced the net selling figure to Rs 3,775 crore.
Year-to-date, FPI selling has reached Rs 29,519 crore. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the trend of FPI selling is expected to persist as long as US bond yields remain elevated.
Conversely, FPIs have maintained a consistent buying trend in debt, which began earlier this year and continues. In February alone, FPIs purchased debt worth Rs 16,559 crore, bringing the total for 2024 to Rs 36,395 crore, as per NDDL data. This buying trend is anticipated to continue.
Vijayakumar explained that FPIs have refrained from aggressive selling in equity despite rising US bond yields due to consistent losses in the battle with Domestic Institutional Investors (DIIs). Consequently, FPIs are hesitant to engage in aggressive selling, recognizing the need to repurchase the same stocks later when market conditions are favorable for buying.
Technical View
Nifty is showing indications of a bullish breakout from a cup and handle formation, with 22,125 serving as a critical resistance level. If this barrier is overcome, we anticipate further upward movement towards the levels of 22,350 and 22,500. On the contrary, strong support is expected within the range of 21,800 to 21,600,” stated Santosh Meena, Head of Research at Swastika Investmart Ltd.
“Meanwhile, Bank Nifty exhibits a double bottom formation, with resistance seen at 46,800–47,000; surpassing this level could trigger short covering momentum towards 48,000. Conversely, support zones are identified at 45,700–45,400,” he further commented.
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