Sensex, Nifty may continue witnessing high volatility; will bears come back to haunt D-Street now?

Domestic benchmark indices managed to gain for the fourth consecutive day on Wednesday, registering nearly half a percent jump. This was despite the massive fluctuations seen by Sensex and Nifty. “On the daily chart, the market established a ‘Hanging Man’ structure after correcting to a very harsh but far-reaching level of 11745. This invites bearishness, however, for that it must be at the top of the rally, which is not the case. Nifty has spent a lot of time between 12030 and 11660. Nifty must do something to keep this momentum going,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities.

India VIX or the fear gauge of domestic indices was up 1% on Wednesday, closing just below 23 levels after having breached that mark during the day. Analysts say volatility could remain high in the coming sessions with Nifty facing resistance at 12,025-12,050 levels. “There is a possibility of retesting upper resistance levels of 12025 again, before showing any intraday weakness from the highs. Broader range movement could be expected around 12050-11800 levels in the next 1-2 sessions,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Call and Put data: For the October series, maximum call open interest (OI) is placed at 12,500 strike with 26.18 lakh contracts. This is followed by 22.78 lakh contracts at 12,000 strike. Put OI is maximum at 11,000 strike with 25.53 lakh contracts, and then at 11,500 strike with 23.40 lakh contracts.

Global watch: Stock markets in the United States ended on the lower side on Wednesday. Dow Jones slipped 0.35% while Nasdaq was down 0.28%. Asian peers were also trading with losses on Thursday morning. Shanghai Composite was down over 1% and Hang Seng was down with losses as well. TOPIX, Nikkei 225, KOSPI and KOSDAQ were all trading in the red.

US stimulus talks continue: Stimulus talks in the US continued but did not reach any conclusion on Wednesday. Democrats and Republicans will continue to discuss the fine print today. 

FPI and DII data: On Wednesday Foreign Institutional Investors (FII) bought stocks worth Rs 2,108 crore and were also net buyers of index futures and options. Domestic Institutional Investors (DII) continued to pull money away from stocks, selling Rs 1,633 crore worth equities.

Bulk and Block deal: BPCL ESPS Trust bought 4.3 crore shares of the Bharat Petroleum Corporation Ltd. on Wednesday through a Bulk deal. HSBC Bank Mauritius Limited and WestBridge Crossover Fund sold Greenply Industries’ shares while Plutus Wealth Management bought the same.

Results Today: Today Dalal Street will see Bharti Infratel, Asian Paints, Bajaj Auto, HDFC Asset Management Company, SBI Cards and Payment Services, Hexaware Technologies, Indian Bank, Biocon, Crompton Greaves Consumer Electricals, L&T Finance Holdings, Mphasis, Pricol, Sterlite Technologies, and UCO Bank announce their quarterly results.