FIIs make lowest single-day selling in six sessions in Indian equities. What to expect in Friday’s trading?

As per NSE data, FIIs buying value stood at ₹7,993.16 crore and selling at ₹8,275.22 crore — resulting in an overall outflow of ₹282.06 crore from Indian stocks on Thursday. FIIs are net sellers since March 9th amidst contagion fears in the banking and financial sector in western economies.

Meanwhile, DIIs bought ₹9,226.46 crore and sold ₹7,175.01 crore in the equities — registering an inflow of a whopping ₹2,051.45 crore. They have continued to offset losses from FIIs selling in the Indian market.

On Thursday, Sensex gained by 78.94 points or 0.14% to end at 57,634.84. While Nifty 50 was up by 13.45 points or 0.08% to end at 16,985.60.

Vinod Nair, Head of Research at Geojit Financial Services said, “With the turbulence at Credit Suisse and ahead of the ECB policy announcement, investors’ attention has switched to developments in the European market. Consistently, unfavourable signs in global markets are encouraging investors to move to safe havens such as the dollar and gold, while FIIs are withdrawing funds from the domestic market in response to the Indian rupee’s depreciation. Though the SVB & Credit Suisse crisis has eased, the market lacks the confidence to hold positions on contagion fears.”

Rupee weakened for the fourth day in a row against the US dollar amidst foreign funds outflow and mixed sentiment in counterparts. The local unit closed at 82.77 against the dollar compared to the previous day’s print of 82.65 per dollar.

Also, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities said, markets reversed the downward trend to end with modest gains as a major rebound in the stock of the troubled financial company Credit Suisse provided some hopes to traders after the Switzerland government stepped in to support the financial giant. Indian markets outperformed its Asian peers after buying in financials, oil & gas, power, and realty stock led the recovery.

On Thursday, Credit Suisse said that it will borrow up to CHF 50 billion from the Swiss National Bank (SNB) under a Covered Loan Facility as well as a short-term liquidity facility. This led the Swiss lender’s stock to rally over 32% in the day. Also, European and Wall Street witnessed some upside.

In regards to the banking crisis, Mitul Shah – Head of Research at Reliance Securities explained that globally, the crisis in the US banking system has roiled markets with the banking sector coming under pressure across markets on fears of contagion. Markets are concerned over the health of the financial system reiterated by rating agency Moody’s cutting its outlook on the US banking system from stable to negative. The collapse of Silicon Valley Bank following losses in its bond portfolio is the biggest bank failure since the global financial crisis and has sent shockwaves through the banking sector.

For Friday, Rohan Shah-head technical analyst at Stoxbox said, “Nifty took support near 16,855. Intraday traders can look for long opportunities only above the resistance level of 17,130 if it sustains for 15 minutes. Traders can look for fresh shorts only if nifty breaks the 16,800 level & remains below for 15 min to ensure short.”

Further, Rohan Patil, Technical Analyst, SAMCO Securities said, “The overall trend still remains in a bearish to sideways mode. The support for the Nifty is placed at around 17,400 – 17,350 levels and resistance are capped at 17,800 levels. In case the Nifty breach below 17,350 levels than 17,200 will be the next support zone. A strong break above 17,800 will indicates a breakout in index.”

On technical terms, Chouhan said, “the market has formed a reversal formation after hitting the key support near 16900/57450 and 16800/57150 levels. 17100/58000 will be a major hurdle for the market on Friday, and a decisive breach of it will help the market to move higher. Towards 17250-17275/58400-58500 levels. There is support at 16900/57450 and 16850/57150. On breaking 16850/57150, the Nifty/Sensex may slide towards 16750/56850 or 16600/56400 levels. For Bank Nifty, the important resistance level is 39500, above which it will bounce towards 40000 and 40200 levels.”

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