Pre-market: Nifty key levels; Stocks to react to Q4 nos, IIP data on May 13

All you need to know before the market opens on Monday, May 13: Gift Nifty hints gap-down open; India's IIP growth rate slows; Jindal Steel, DLF, UPL and Zomato Q4 results today.

Pre-market stock update for May 13, Monday: Last week, the NSE Nifty 50 ended nearly 2 per cent lower as election-related jitters triggered volatility in the stock market. However, the NSE benchmark index bounced back a wee bit on Friday amid supportive global cues.

Another key reason for the weakness was aggressive selling by foreign investors. The FIIs have net sold stocks worth nearly Rs 25,000 crore so far this month.

Ashwin Ramani, Derivatives & Technical Analyst at SAMCO Securities said the Foreign Portfolio Investors (FPIs) have been aggressively building short positions and liquidating existing long positions in Nifty Futures as the long short ratio stood at 33 per cent on May 09.

Against this backdrop what should be your trading strategy on Monday. Will the Nifty 50 index extend its relief rally on Monday, or will the NSE benchmark resume downtrend?

Should you be a buyer or seller today? Here’s what market experts recommend:

Vinod Nair, Head of Research, Geojit Financial Services expects the current trend in the domestic markets to continue in the short term due to election-led uncertainties. In the week ahead, the analysts in a note said, that investor attention will be focused on the release of India and US CPI data, Europe and Japan’s GDP releases, and the FED chair speech. Furthermore, the next set of Q4 results will also attract market sentiment.

Om Mehra, Technical Analyst at SAMCO Securities says that the formation of an inside bar on the daily chart for the Nifty, coupled with the widening gap from the 20 DMA indicates weakness in the market. The crucial range 21,900 to 22,200 would be decisive in determining the upcoming trend for the Nifty.

Rupak De, Senior Technical Analyst at LKP Securities highlights that on the daily chart, the Nifty has broken down from the rising channel, indicating a rise in bearish sentiment. The trend is likely to remain weak in the near term, with resistance noted at 22,200. As long as the Nifty remains below this level, a strategy of selling on rallies may be favorable for traders. 

Support at the lower end is situated at 21,950 on a sustained basis; a decisive drop below this level could trigger panic in the market, Rupak De added.

On the contrary, independent technical analyst, Ravi Nathani expects a technical rebound in the near-term, as the analyst believes the market is oversold. Nathani expects a bullish breakout on the chart, as and when Nifty surpasses and sustains above 22,136 level. READ MORE

Key triggers

At 07:00, Gift Nifty futures quoted around 22,055 levels, hinting at a likely start to the trading action on the Nifty.

Markets are expected to react to slower growth rate in the IIP (Index of Industrial Production) which was released on Friday after market hours. India's Industrial Production to 4.9 per cent in March as against 5.7 per cent in February.

Later today, post market hours retail inflation data for April will be announced. 

Markets in the Asia-Pacific region exhibited tepid trend on Monday morning. The Australian and Japan’s benchmark indices were marginally in red, while Kospi traded with a mild gain.

Among key commodities, Gold futures quoted around $2,365 levels, while Brent Crude Oil eased back to near $82 levels.

Among individual stocks, Aditya Birla Capital, Alembic, Cera Sanitaryware, Chalet Hotels, DLF, Electrosteel Castings, GIC Housing Finance, Ind Swift Labs, Jindal Steel, Manali Petrochemical, MapMyIndia, Sanofi India, Tube Investments of India, UPL, Varun Beverages and Zomato will be in focus ahead of Q4 results.