The market made a bearish movement today, closing nearly 82 points down. This happened due to the US imposing reciprocal tariffs globally, raising concerns about the global economy. Today, the market opened lower and then made a strong bounce back within a short period. It opened near 23,150, and after a couple of 5-minute candles, it reached approximately 23,281, making 23,000 a strong support level. After that, the market consolidated throughout the day and closed around 23,250.10, down by 82 points.
Global Market Analysis
U.S. President Donald Trump yesterday made a significant announcement with a reciprocal impact across the globe, affecting several economies and causing a decline in Asian markets. The Japanese market fell nearly 4%, while the South Korean market dropped around 3%. Meanwhile, the U.S. market had a muted closing yesterday. In the trade setup, the focus will be on the U.S. stance, as the President mentioned implementing a kind of discounted tariff.
Us just put the discounted tariffs for example If any country imposes a 100% tariff, the USA has applied a reciprocal tariff of only 50%, which is why it is being called a “discounted tariff.” However, if a deal is not reached with that country, the U.S. may eventually impose a 100% tariff as well. Now, a major concern is arising as people are questioning how the tariff ratios have been calculated. Many believe that the method used to describe these tariffs is misleading or incorrect.
Following this market trend, the Nasdaq saw a nearly 4% decline today, hitting a new near-term low of 18,561.88. After that, it recovered a few points and is now trading around 18,745. Over the past 6-7 trading sessions, it has dropped by approximately 8.50%.
Domestic market analysis
The market did not experience as extreme a bearish movement as anticipated. Nifty closed only 82 points lower today, mainly due to a sell-off in the IT sector. The IT sector is witnessing major short positions as it continues to decline, driven by concerns over rising inflation in the U.S. and globally. Additionally, since 90% of IT companies’ business comes from Europe and America, this has significantly impacted the sector, raising concerns about the future management position and overall profit margins of these companies.
Today, Bank Nifty provided strong support in this bearish market, closing nearly 250 points higher. This acted as a bullish support from the banking sector and helped limit a further decline in the Nifty 50. Now, all eyes are on next week as the RBI is set to announce a key decision.
It is widely expected that the central bank will cut the interest rate by 25 basis points. Additionally, the RBI has introduced measures to ensure the swift implementation of this rate cut in the economy.
FII&DII activity and option chain analysis
FII&DII activity
Amid rising tariff tensions, FIIs are continuing their selling pattern, similar to previous months, which is becoming a significant factor in the Indian equity market. Today, FIIs sold nearly ₹2,806 crore in the Indian cash market, while DIIs bought approximately ₹221 crore. This has contributed to a bearish sentiment, as FIIs remain uncertain about the market outlook in the coming months. It remains to be seen how FIIs will contribute to the Indian equity market in the upcoming trading sessions.
Option Chain Analysis
As the new week begins, we are not seeing much volume in contracts. Looking at the data, the 23,300 level appears to be a strong resistance, with 57,148 open contracts, making it a key level for call writers. Similarly, the 23,200 level holds 52,456 contracts, creating a narrow trading zone for market participants.
Taking a broader view, the 23,500 level also stands out as a significant resistance, with 62,306 open contracts from option writers. On the support side, the 23,000 level has strong support, with 87,043 contracts, indicating solid positioning by put writers.
Also read; Trade setup for 03 April; china restrict investment, 23000 level, option chain analysis
Nifty 50 prediction
Today, the market opened lower but recovered much faster than most traders had anticipated. A 2.5% decline was expected due to a broad sell-off in Asian markets, but the market did not follow the same trajectory. Instead, it rebounded quickly, indicating strong underlying support.
Looking ahead, the upcoming trading sessions will be crucial, especially after Nasdaq’s 4% decline today. Tomorrow’s market opening will provide insights into how the market sustains itself after these developments. This event has been long anticipated, and now that it has unfolded, market participants will closely monitor its impact.
From a technical perspective, the 23,800 level is expected to act as strong resistance. However, based on earlier analysis, the market appears to be moving into a sideways, choppy phase. As long as 23,000 holds as a support level and 28,000 remains untouched on the upside, it is difficult to draw a clear conclusion about the upcoming trade setup.
Conclusion for tomorrow trade setup
The Indian equity market has been consolidating for the past six months. Initially, weak GDP numbers impacted sentiment, followed by uncertainties related to Trump’s policies. However, the market has shown strong consolidation. Today, the early session saw a sharp recovery, providing a boost to the overall trend.
If the market experiences another decline, it is likely to attempt a recovery rather than sustain lower levels. The key now is to wait for a decisive move beyond either the 23,800 resistance or the 23,000 support level in the coming days.
