Anuj Gupta, VP, IIFL

In the first week of 2023, we noticed a sharp correction in the Indian equity market. Nifty corrected by 1.36% and closed at 17859 levels. Banknifty corrected by 1.86% and closed at 42188 levels. Foreign institutional investors (FIIs) remained sellers throughout the first week of 2023 as they sold equities worth Rs 7,813.44 crore, while domestic institutional investors (DIIs) bought equities worth of Rs 2,756.58 cr.

Fear of recession put pressure on the global equity market and also in the Indian equity market. Last week US stocks rallied after jobs data showed a cooling in the labor market. Report was slightly stronger than expected, even though average hourly earnings rose 0.3% against expectation for 0.45%. Data is coming positive in the US economy and the Federal bank is signalling a slowing hike in interest rates.

Technically the trend of nifty and banknifty are positive. Nifty has a strong support at 17700 levels and then 17500 levels while resistance at 18250 and then 18500 levels. Banknifty has a strong support at 41600 and then 40900 levels and resistance at 42800 and then 43500 levels.

We are recommending buy on support levels and expecting upside movement in the nifty and banknifty. If Nifty breached the resistance levels of 18250 levels then it may test 18500 levels. If banknifty breached the resistance levels of 42800 levels and then 43500 levels.

On the ruppe front it tested the 3 week’s high levels of 82.38 levels, but on the last trading day it again corrected and closed lower by 0.08% and closed at 82.27 levels. Technically the dollar is trading at an overbought zone and expecting a correction in the dollar in coming days. Rupee has a support at 82.30 and then 81.80 levels while resistance at 83.00 and then 83.30 levels.