The market saw a weak start to the day breaking the trend of the last eight sessions when the market closed in the green. Traders mostly blamed profit booking as the key reason behind the weakness but added that the market outlook is strong. Some nervousness also lingered because of the US Fed rate decision later in the day.
As of 10.30 am, the Nifty 50 index traded at 18,094.20, down 53 points or 0.29 percent. Bank Nifty also traded lower by 0.35 percent.
Option data showed traders are mostly positioned around 18,100 with both calls and put writing seen at that level. It is also indicative of a huge number of Straddle trades taken by traders at this level. This level will be key for intraday moves ahead.
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Call writers were also present at 18,200 level positioning that level as a hurdle for the index.
“Key indices are likely to be under pressure in early trades ahead of the US Fed meeting on interest rate later today,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.
“Investors are likely to exercise caution as global equity markets too are trending lower fearing any further rate hike could push key economies into recession and temper growth going ahead. For Nifty, the support is at the 17,951 mark, with intraday support seen at 18,027 mark”.
Several PSU stocks were in huge demand. BHEL saw a heavy long buildup, followed by Hindustan Aeronautics and Bharat Electronics. Interglobe Aviation, which is going to benefit from Go First's bankruptcy, also saw a long buildup.
On the other hand, Manappuram Finance saw a short build-up. Indus Towers, Bank of Baroda and Bharat Forge were others where traders have taken bearish trades.
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