The Asian markets traded mixed after the Chinese central bank decided to cut its key policy rate for the first time in 10 months in a move to prop up growth.

Meanwhile, trends on SGX Nifty indicate a negative start for the broader index in India. The Nifty futures were trading 65.5 points, or 0.35%, lower at 18,809 on the Singaporean Exchange. 

Investors await the testimony from the US Federal Reserve Chair Jerome Powell in markets that remain dominated by monetary policy bets.

On Monday, the benchmark indices ended lower amid profit booking and cautious trade in the global markets. The Sensex closed 216 points, or 0.34%, lower at 63,168.30 while the Nifty ended the day at 18,755.45, down 71 points, or 0.37%.

Meanwhile, both FIIs and DIIs emerged as net sellers on Monday. The Foreign institutional investors (FIIs) sold nearly ₹1,031 crore in Indian stocks, while DIIs sold shares to the tune of a little over ₹365 crore.

On the technical front, Nifty formed a bearish Dark Cloud Cover pattern on daily charts on June 19. However, analysts believe, in the recent past, such formations have not seen any follow through. 

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Nifty

Nifty slipped into weakness amidst a range movement on Monday and closed the day lower by 70 points. 

“A reasonable negative candle was formed on the daily chart at the swing high. This pattern is signaling a formation of bearish dark cloud cover type candle pattern. Technically, any sharp follow through action on the downside post this pattern indicates near term top reversal pattern for the underlying,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

According to Shetti, resistance for Nifty is placed at around 18,900 levels, while immediate support is seen at 18,670.

“The market has been showing sustainable uptrend over the last few weeks and bearish patterns in between have not been impacted much, as we observe lack of sharp selling interest in the market. The immediate support of 10 day EMA is intact for the last 15 sessions and 20day EMA has not been violated on the down side since the past three months,” Shetti added.

Also Read: Global market: SGX Nifty to China’s lending rate cut – key triggers for Indian stock market

He believes the near term uptrend status of Nifty remains intact and there is a possibility of upside bounce from the lows in the next 1-2 sessions. 

Nifty Bank

The Nifty Bank index is likely to consolidate in the range of 43,400 – 44,500 from short term perspective, analysts said.

“On the upside the recent swing high of 44,500 is acting as a stiff resistance while on the downside 43,400 where the 40-day exponential moving average is placed is acting as a crucial support,” said Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas.

He believes a decisive move beyond these extremes shall lead to a trending move in that direction.

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Updated: 20 Jun 2023, 08:34 AM IST