Trends on SGX Nifty indicate gap-down opening for stock market indices

FPJ Web DeskUpdated: Friday, February 11, 2022, 09:03 AM IST
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Indian markets could open flat to mildly higher in line with mixed Asian markets today and despite negative US markets on Friday, /AFP PHOTO / WANG ZHAO |

Trends on SGX Nifty indicate a gap-down opening for the broader index in India with a loss of 182 points. The Indian markets could open lower in line with largely negative Asian markets today and sharply negative US markets on Thursday, said Deepak Jasani, Head-Retail Research, HDFC Securities.

Nifty is likely to come under heavy bearish pressure after the US inflation report showed that the Consumer Price Index (CPI) jumped to 7.5 percent on a yearly basis in January and the CPI is at a four-decade high, said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd. The Street feels that hot CPI inflation may mean the Federal Reserve raise interest rates even faster. Further, the odds of a 50-basis point hike jumped to around 50/50 and the yield on the 10-year Treasury is now trading around 2 percent.

Benchmark Indices are expected to open on a negative note as suggested by trends on SGX Nifty, said Mohit Nigam, Head - PMS, Hem Securities. US stock markets ended sharply lower on Thursday after US consumer prices data came in hotter than expected and subsequent comments from a Federal Reserve official raised fears the US central bank will hike rates aggressively to fight inflation. NASDAQ was down by 2.1 percent to 14185.64 levels.

Asian markets are trading on the downside as investors are reacting to losses seen overnight in the US market after the release of the US consumer inflation report. Hang seng index is trading 0.62 percentlower, Shanghai composite down by 0.52 percent. On the technical front 17,420 and 17650 are immediate support and resistance in Nifty 50. For Bank Nifty 38,500 and 39,200 are immediate support and resistance respectively, Nigam added.

Nifty rose for the third consecutive session on February 10 aided by the outcome of RBI MPC meet at which the accommodative stance was maintained and policy rates were kept unchanged. At close, Nifty was up 0.81percent or 142 points at 17,605.8.

Nifty rose on Thursday but the advance decline ratio fell to almost equal, suggesting that the broader market is refusing to participate in the same measure and the current rally may be running out of steam. The higher than expected US inflation number could act as a headwind for the global markets. Nifty could face resistance at 17,706 while 17,427 could offer support in the near term.

Asian stock trade lower

Stocks were largely lower in Asia Friday after Treasuries and Wall Street shares sank on a jump in US inflation to a fresh four-decade high that stirred hawkish comments from a Federal Reserve official.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.76 percent, with most markets in the red, though a resurgence in property stocks helped greater China markets. Japanese markets were closed for a holiday. An index tracking Hong Kong listed mainland property firms rose 2 percentand one tracking onshore Chinese real estate gained 1 percent after a media report that China will allow real estate firms easier access to presale proceeds from residential projects, loosening a liquidity squeeze on the sector.

US stocks close lower

US stock indexes finished near session lows Thursday, after a day of volatile trading, as investors assessed a hotter-than-expected January consumer-price index report that underlined expectations for the Federal Reserve to respond aggressively to persistent inflation running at a four-decade high.

Major global stock indexes fell on Thursday under pressure from crucial US inflation data, falling technology shares and rising benchmark bond yields.

The US rate of inflation climbed again in January to 7.5 percent and stayed at a 40-year high, suggesting upward pressure on consumer prices is unlikely to relent soon and putting more pressure on the Federal Reserve to act. The consumer price index rose 0.6 percent in the first month of the new year, driven by big advances in rent, food and energy. The increase exceeded Wall Street’s forecast of a 0.4 percent gain. The 7.5 percent surge in the cost of living in the past 12 months is the biggest since February 1982.

The US Fed may have to act swiftly and aggressively to make sure inflation doesn’t get any worse. St Louis Fed Chair James Bullard said the central bank should hike rates by 100 basis points over the next three meetings. He raised the possibility of considering a move in between scheduled policy reviews.

US treasury yields jumped about 10 basis points Thursday, with the 10-year Treasury note topping the 2 percent threshold for the first time since 2019, trading at 2.028 percent in afternoon action.

Oil prices ease

Oil prices eased early on Friday as hot US inflation fanned worries about aggressive interest rate hikes and as investors awaited the outcome of US-Iran talks that could lead to increased global crude supply.

Results today

ONGC, Divis Labs, Ashok Leyland, Motherson Sumi Systems, Oil India, India Cements, Allcargo Logistics, Anupam Rasayan, Apollo Hospitals Enterprise, Arvind Fashions, Bajaj Hindusthan Sugar, Balaji Telefilms, Mrs Bectors Food Specialities, Brookfield India Real Estate Trust REIT, Dhanlaxmi Bank, Force Motors, Fortis Healthcare, Glenmark Pharmaceuticals, Godrej Industries, Honeywell Automation, HUDCO, Indigo Paints, Inox Wind, Jaiprakash Power Ventures, Kalpataru Power Transmission, Mazagon Dock Shipbuilders, Metropolis Healthcare, MOIL, Nazara Technologies, NHPC, Power Finance Corporation, Puravankara, RateGain Travel Technologies, Shree Renuka Sugars, Sapphire Foods, Shriram EPC, Sobha, Star Health and Allied Insurance Company, Ujjivan Financial Services, Voltas, and VA Tech Wabag.

Stocks under F&O ban

Three stocks – BHEL, Punjab National Bank and SAIL – are under the F&O ban for February 11.

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