Indian Share Markets Trade in Narrow Range as Inflation Concerns Offset Strong Earnings

Key benchmark indices of the Indian stock market traded in a narrow range with a positive bias during a holiday-shortened week, following a strong rally in the previous week. Steady foreign money inflows and better-than-expected second-quarter corporate earnings helped absorb profit-booking, even as inflation concerns returned to focus. Globally, a stronger-than-expected US Consumer Price Index print cemented expectations of a December interest rate hike by the US Federal Reserve, pushing global bond yields higher. Domestically, retail inflation jumped to a two-year high and crossed the Reserve Bank of India's upper tolerance limit due to surging food prices, which snapped a three-session winning streak for the markets at the end of the week.

Market Outlook

Sumeet Bagadia, Executive Director at Choice Broking, believes the overall market bias remains positive as long as the Nifty 50 index stays above the 25,000 mark. The Nifty 50 has immediate support between 25,000 and 25,080, with resistance placed between 25,250 and 25,400. Its Relative Strength Index stands at 75.22, showing strong but stretched momentum, while the India VIX volatility index declined 5.07 percent to 15.7750. For the Bank Nifty index, immediate support is seen between 60,400 and 60,750, and resistance lies between 61,300 and 61,500, with an elevated RSI of 75.70.

Stock Recommendations

Choice Broking recommends three specific shares to buy: Bharti Airtel, Bajaj Finance, and Nestle India. Bharti Airtel shares closed at 2,106 rupees after a V-shaped recovery from the 1,726 rupee zone, trading comfortably above key moving averages. Bajaj Finance shares closed at 1,117 rupees following a breakout above the 1,100 rupee resistance and a recovery from the 905 rupee support level. Nestle India shares closed at 1,263.20 rupees, holding firm above short-term support after bouncing from a swing low of 1,147.40 rupees.

Context

Broking firms and market experts regularly issue technical analyses and stock picks to help retail investors navigate daily market movements based on chart indicators like moving averages and the Relative Strength Index. Stock prices fluctuate daily in response to macroeconomic data releases, domestic inflation prints, and foreign institutional investor fund flows. Technical support and resistance levels are calculated using historical trading data to identify potential price reversal points.