Shillong, October 20: The US 10-year yield, hovering around 5 percent, continues to pose challenges for equity markets, as noted by V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
As per IANS, the volatile situation in West Asia, although currently overlooked by the market, could present near-term challenges.
Foreign Portfolio Investors (FPIs) are expected to remain sellers, particularly impacting banking stocks, which constitute a significant portion of their Assets Under Management (AUM). This situation offers a buying opportunity for domestic investors as these stocks are currently trading at fair valuations, according to Vijayakumar.
Recent data indicates that India’s food grain production has reached a record high, which may help control food inflation. This, in turn, suggests that the Monetary Policy Committee (MPC) is likely to maintain a prolonged pause, a favorable condition for banking stocks.
Vaishali Parekh, Vice President of Technical Research at Prabhudas Lilladher, observed that the Nifty index faced resistance at the 19,850 zone and subsequently experienced substantial profit booking, leading to a drop below the 19,700 level. The bias has turned weak, and sentiment remains cautious.
From a technical perspective, the index’s near-term support is around 19,600, with the significant 50EMA zone. A breach of this level may intensify selling pressure, with the next major support appearing near the 19,200 zone.
For the day, the support is anticipated at 19,500 levels, while resistance is at 19,800 levels.
On Friday, the BSE Sensex has declined by 164 points, reaching 65,464 points. Notably, ITC is down by more than 2 percent, and HUL has decreased by over 1 percent.