Trends on SGX Nifty indicate a negative opening for the index in India. Indian markets could open lower in line with largely negative Asian markets today and lower US markets on Thursday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
Benchmark Indices are expected to open on negative note as suggested by trends on SGX Nifty, said Mohit Nigam, Head - PMS, Hem Securities. "On Thursday the market remained in positive territory but the pace was capped due to weak macro-economic data coupled with rising cases of coronavirus in the US. A little pause in this upswing can be expected as some minor correction can take place. The indices can witness some consolidation at these levels or can be faced with minor corrective fall which presents a good opportunity to deploy additional funds in good quality stocks. Investor sentiments got a push with the Commerce and Industry minister Piyush Goyal statement that India's strong startup ecosystem will help the country to change from assembly line economy to knowledge-based economy.
"On the technical front, the key resistance levels for Nifty50 are 18,300 followed by 18,330 and on the downside 18,190 followed by 18,120 can act as strong support. Key resistance and support levels for Bank Nifty are 38,670 and 38,320 respectively," Nigam added.
Nifty rose for the fifth straight session on January 3 aided by positive global cues. At close, Nifty was up 0.25 percent or 45.4 points at 18,257.5.
Nifty rose for the fifth straight session; however it seems to be running out of steam going by the intra day moves. While the Nifty seems headed towards the earlier high of 18,604, some correction prior to that is likely. 18,129-18,342 seems to be the band for the Nifty in near-term, said Jasani.
Asian stocks decline
Asian stocks dropped Friday after a raft of Federal Reserve officials signaled they will combat inflation aggressively and the Nasdaq 100 fell to its lowest level since October.
MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.8 percent in mid-morning trade, while Australia lost 1.2 percent and Japan's Nikkei shed 1.9 percent by the midday break. South Korean shares dropped 1.5 percent after its central bank raised its benchmark rate 25 basis points to 1.25 percent on Friday, taking it back to where it was before the pandemic as it seeks to restrain consumer price rises. China's blue-chip index was down 0.3 percent and Hong Kong's Hang Seng index was off 0.6 percent.
US stocks close lower
US stocks closed down on Thursday, as a rebound in technology shares stalled out, snapping a three-day winning streak for the Nasdaq Composite. The S&P's technology index fell 2.7 percent while consumer discretionary fell 2 percent.
The Dow Jones Industrial Average fell 176.7 points, or 0.49 percent, to 36,113.62, the S&P 500 lost 67.32 points, or 1.42 percent, to 4,659.03 and the Nasdaq Composite dropped 381.58 points to 14,806.81.
Shares of technology companies, expected to see revenue and earnings grow faster than average, fell on Thursday, reviving a trend from the start of 2022, when Treasury yields rose rapidly in response to expectations the Federal Reserve will be much more aggressive than previously anticipated in fighting surging inflation.
US inflation at highest level in four decades
US inflation as measured by the consumer price index surged 7.0 percent in December, posting its biggest year-on-year increase in nearly four decades, data on Wednesday showed.On Thursday, a reading of US wholesale inflation — the producer-price index — receded but still held around 9.7 percent year-over-year annualized rate compared with a nearly 40-year high of 9.8 percent in the prior month. The monthly rise of 0.2 percent was the lowest in 13 months.
Several Fed officials spoke publicly about battling high inflation with Lael Brainard the latest, and most senior, US central banker signaling that the Fed was getting ready to start raising rates in March.
US Treasury notes yields fall
In the bond market, yields on 10-year US Treasury notes were at 1.725 percent, slowly creeping up to Monday's near two-year highs, signalling investors' preference for the safety of government debt over volatile technology and growth stocks. Japan's 10-year government bond yield hit as high as 0.156 percent, its highest since March 2021.
South Korea raises interest rate to pre-pandemic level
South Korea’s central bank raised its benchmark rate back to where it was before the pandemic on Friday, seeking to restrain inflation and household debt growth as global policymakers move to end emergency stimulus to contain rapid consumer price rises.
The Bank of Korea’s monetary policy board lifted borrowing costs by 25 basis points to 1.25 percent, the highest since March 2020, a move expected by 25 of 35 analysts in a Reuters poll.
India's share of merchandise exports at record high in December
India’s merchandise exports and imports rose to a record in December, causing the trade deficit to remain elevated despite having narrowed over the preceding month. Trade deficit eased to $21.68 billion in December 2021 from $22.91 billion in November, according to data published by the Ministry of Commerce and Industry on Thursday. Exports rose 38.9% year-on-year to $37.8 billion and imports increased 38.6% over the preceding year to $59.5 billion. Month-on-month, exports rose 25.8% and imports increased 12.4%.
China's December exports up
China's exports rose 20.9 percent year-on-year in December and imports jumped 19.5% over the same period, customs data showed on Friday. Analysts in a Reuters poll had expected exports to increase 20 percent last month after jumping 22 percent in November.
Imports were seen rising 26.3 percent following a 31.7 percent gain in November, according to the poll. China posted a trade surplus of $94.46 billion last month, versus a forecast for a $74.50 billion surplus in the poll. China reported a $71.72 billion surplus in November.
Indian economy forecast to grow 6.5% in FY 2022: UN
India is forecast to grow at 6.5 percent in fiscal year 2022, a decline from the 8.4 percent GDP estimate in previous financial year, and while the country’s economic recovery is on a ''solid path'' amid rapid vaccination progress, coal shortages and high oil prices could put the brakes on economic activity in the near term, the UN said on Thursday.
Three stocks under F&O ban
Three stocks - Indiabulls Housing Finance, Vodafone Idea, and SAIL - are under the F&O ban for January 14.
(With inputs from Reuters and agencies)
