Trends on SGX Nifty indicate positive opening for Indian indices

FPJ Web DeskUpdated: Wednesday, March 23, 2022, 09:08 AM IST
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Equity markets in Asia gained as investors expanded their search for hedges./Representative image |

The trends on SGX Nifty indicate a positive opening for the stock market indices in India. The stock markets could open mildly higher in line with positive Asian markets today and positive US markets on Tuesday, said Deepak Jasani, Head-Retail Research, HDFC Securities.

Benchmark Nifty to trade on optimistic note on the back of firm global cues as it aims to reclaim 17,500 mark, with investors looking beyond Fed Chair Jay Powell's hawkish comments, said Prashant Tapse, Vice President (Research), Mehta Equities Ltd. Helping sentiments are also the FIIs cues as they had bought shares worth RS 384 Crores in yesterday’s volatile session.

The street is actually buoyant after Reserve Bank of India Governor Shaktikanta Das has said that there is no prospect of the economy falling into a stagflation vortex and retail inflation is expected to moderate going forward. Technically speaking, the make-or-break for Nifty’s support is seen at the psychological 17000 mark. Only below Nifty 17000 zone, expect a waterfall of selling which could take Nifty down to 16691 mark with inter-week perspective. We suspect the technicals are aggressively bullish which should take Nifty above its biggest hurdles at 17807 mark.

Nifty is up more than 1,650 points from the recent bottom of 1,5671, registered on March 8, 2022. Amongst the sectors, Technology, Oil & Gas and Auto were out performers while reality and FMCG Indices ended in the red. Support for the Nifty has now shifted up to 1,7100 and the same should be kept as a stop-loss in trading long positions, Tapse said.

Mohit Nigam, Head - PMS, Hem Securities, said, benchmark Indices are expected to open on a Positive note as suggested by trends on SGX Nifty. US stock markets ended positive on Tuesday after Treasury yields marched higher on Tuesday, as investors digested the increased likelihood of swift interest rate hikes following hawkish comments from the US Federal Reserve. NASDAQ was up by 1.95 percent to 14108.82 levels.

Oil prices edged lower on Tuesday after it looked unlikely that European Union nations would agree to join the United States in a Russian oil embargo in retaliation for its invasion of Ukraine. On the technical front 17,200 and 17,500 are immediate support and resistance in Nifty 50. For Bank Nifty 36,000 and 37,000 are immediate support and resistance respectively, Nigam added.

On March 22, the stock markets closed on a positive note. The Nifty index wiped out its early losses and recovered more than 1 percent to close at 17315.50 levels while Banknifty managed to settle at 36348.55 levels with 330 point gains. The heavyweight Reliance Industries contributed 2.5 percent gains in the index. The benchmark Sensex was up 696.81 points or 1.22 percent at 57,989.30. The broader Nifty was up 197.90 points or 1.16 percent at 17,315.50

Asian stocks gain

Equity markets in Asia gained as investors expanded their search for hedges. Shares in Japan led gains in Asia-Pacific during Wednesday morning trade, as investors monitored oil prices and continued to assess the outlook for US Federal Reserve monetary policy.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.6 percent, with Hong Kong, Seoul and Sydney all registering similar sized gains. The index is at its highest since March 4. Japan's Nikkei jumped 2.5 percent to touch a two-month top and the moves follow a gain of 1.1 percent for the S&P 500 and nearly 2 percent for the Nasdaq in overnight trade.

US stocks close higher

US stocks ended higher Tuesday, shaking off a wobble that followed remarks a day earlier by Federal Reserve Chairman Jerome Powell signaling that the central bank could deliver bigger interest rate increases at coming policy meetings in a bid to rein in inflation currently running at a 40 year high. The yield on the US 10-year Treasury note rose 6 basis points Tuesday to 2.375 percent, the highest since May 2019.

The Dow Jones Industrial Average rose 254.47 points, or 0.74 percent, to 34,807.46, the S&P 500 gained 50.43 points, or 1.13 percent, to 4,511.61 and the Nasdaq Composite added 270.36 points, or 1.95 percent, to 14,108.82, Reuters said. Tesla Inc jumped 7.9 percent as the electric-car maker delivered its first German-made cars to customers at its Gruenheide gigafactory.

In the fed funds future markets, odds are rising that the Federal Reserve will become more aggressive and raise interest rates by 50 basis points — or a half-percent — at each of its next two meetings. According to the CME FedWatch Tool, the probability is better than 70 percent that the Fed reaches 2.25 percent by the end of the year.

President Joe Biden and US allies meeting in Brussels on Thursday are expected to announce new sanctions against Russia over its invasion of Ukraine and fresh measures designed to keep the Kremlin from sidestepping existing economic penalties.

Gold, silver likely to be volatile

Gold and silver prices are weaker in midday trading on Tuesday. Sharply rising US Treasury yields are putting pressure on the precious metals markets, as well as the recent rally in the US stock indexes. In international Gold April futures were last down $10.80 at $1,918.50 and silver May future was last down $0.423 at $24.88 an ounce. The benchmark 10-year bond yields in the United States crossed the 2.40 percent mark for the first time since May 2019. Selling was seen in the US and the US equity markets unexpectedly gained put bullion in pressure.

The Russia-Ukraine war situation has not changed much recently, so risk aversion in the marketplace remains somewhat elevated. President Biden Thursday meets with NATO and EU leaders to discuss Russia's invasion of Ukraine. The two-day summit will be held at NATO headquarters in Brussels.

Both precious metals are expected to remain volatile in today’s session, said Rahul Kalantri, VP Commodities, Mehta Equities Ltd. Gold has support at $1905-1894, while resistance at $1940-1950 per troy ounce. Silver has support at $24.55-24.32, while resistance is at $25.35-25.55. In INR terms gold has support at Rs 50,950–50,740, while resistance is at Rs51,580–51,820. Silver has support at Rs 67,020- 66,550 while resistance is at Rs 68,450–68,930.

Crude steadies

Oil steadied at lofty heights, with Brent crude futures up 0.5 percent at $116.13 a barrel and US crude up 0.6 percent to $107.23. Grains remained supported by supply concerns.

On Tuesday, Crude oil showed very high volatility, prices gained in the early trading session amid anticipation of sanctions on the Russian oils by the European Union but prices fell after clarification that the EU is not having any plans to ban Russian oil. Waver on the Russian oils by the EU pushed prices lower. However, decline in the API stocks supported crude oil at lower levels. As per the American Petroleum Institute report released on Tuesday oil stocks in the U.S. decline by 4.28 million barrel last week. Crude oil prices also get supports amid threats to supply as Yemen's Iran-aligned Houthi group attacked Saudi energy and water desalination facilities

Rahul Kalantri, VP Commodities, Mehta Equities Ltd said crude oil prices are expected to remain volatile. WTI Crude oil is having support at $104.5–102.50 and resistance is at $111.20–114.80. In INR terms Crude oil has support at Rs8,140-8,000; while resistance is at Rs8,550–8,740.

Fuel prices hiked

Petrol and diesel prices were hiked by 80 paise per litre each for the second consecutive day on Wednesday , pushing rates to new highs across the country.

Petrol in Delhi will now cost Rs 97.01 per litre as against Rs 96.21 previously while diesel rate has gone up from Rs 87.47 per litre to Rs 88.27, according to a price notification of state fuel retailers. In Mumbai, petrol and diesel rates soared 85 paise to cost Rs 111.67 and Rs 95.85 per litre respectively after the latest hike, the highest among metros.

In Chennai, petrol is retailed at Rs 102.91 and diesel at Rs 92.95 per litre while in Kolkata, petrol costs Rs 106.34 and diesel Rs 91.42 per litre.

Currency outlook

USDINR 29March futures contract showed very high volatility and tested its resistance level of 76.55. Rahul Kalantri, VP Commodities, Mehta Equities Ltd. said, as per the daily technical chart, we observed that a pair recovered from their lows last week and tested its key resistance level of 76.55 again. Looking at the technical set-up, a pair only sustain above 76.30 could show further strength towards 76.55-76.70 else it will test its support level of 76.06 & 75.82 again. We expect a pair could trade in the range of 76.06-76.55 and either side breakout of the range will give further directions.

(With inputs from Reuters)

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