Indian benchmark indices are likely to open lower on Wednesday, following the weakness in the Asian peers and other global markets. Traders are keenly awaiting Jerome Powell’s speech in Jackson Hole Symposium later this week, for signals over rate cuts.
FIIs were back on the selling track after a short-lived buying at Dalal Street.
Nifty futures on the NSE International Exchange traded 64.50 points, or 0.26 per cent, down at 24,969, hinting at a negative start for the domestic market on Wednesday. Shares in Asia fell on Wednesday, weighed down by a tech-led selloff on Wall Street. KOSPI cracked nearly 2 per cent, while Nikkei was down 1.5 per cent. Hang Seng plunged about half a per cent.
The Nasdaq and S&P 500 slid on Tuesday driven by tech stocks. The Dow Jones Industrial Average rose 10.45 points, roughly flat, to 44,922.27, the S&P 500 lost 37.78 points, or 0.59 per cent, to 6,411.37 and the Nasdaq Composite lost 314.82 points, or 1.46 per cent, to 21,314.95.
The dollar got off on the front foot on Wednesday following two days of gains as traders awaited the Federal Reserve’s Jackson Hole annual symposium later this week for clues on the path for monetary policy. The dollar index edged up to 98.393 early on Wednesday, the highest since August 12.
In the commodities space, Oil prices recovered after a fall in the previous session, with Brent crude futures last up 0.46 per cent at $66.09 a barrel. US crude advanced 0.6 per cent to $62.72 per barrel. Elsewhere, spot gold fell 0.07 per cent to $3,312.89 an ounce. Rate sensitive Bitcoin dropped more than 2 per cent to slip below $113,500.
“We recommend continuing with a ‘buy-on-dips’ strategy as long as the Nifty holds above 24,750, with an upside potential toward 25,250 in the near term,” said Ajit Mishra, SVP of Research at Religare Broking. “With participation broad-based across most sectors, barring IT, traders should align their positions accordingly while maintaining a stock-specific approach.”
Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 634.26 crore on Tuesday. On the other hand, domestic institutional investors (DIIs) turned buyers of Indian equities to the tune of Rs 2,261.06 crore on a net-net basis.
Nifty & Sensex outlook
For day traders, as long as the market trades above 24,875/81,300, the uptrend wave is likely to continue on the higher side, potentially moving up to 25,150-25,250/82,000-82,300, said Shrikant Chouhan, Head of Equity Research at Kotak Securities. “On the flip side, below 24,875/81300, the uptrend would become vulnerable. Under such conditions, traders may prefer to exit long positions.” he said.
Nifty50 is well-positioned to extend its upward journey in the near term. Key resistance levels to watch are 25150 and 25300, which could be tested if the current momentum persists, said Sudeep Shah, Head of Technical and Derivatives Research at SBI Securities.
“On the downside, the support zone is placed between the 24880-24850 level. This range is expected to act as a cushion in case of any short-term pullbacks, keeping the broader trend intact. Overall, the technical indicators suggest a continuation of the northward move, with dips likely to attract buying interest,” he said.
Nifty Bank outlook
The support is placed at 55,600, followed by 55,500 for Nifty Bank. Until it closes decisively above 56,150, the outlook stays cautious, and any intraday rise may meet resistance, said Om Mehra, Technical Research Analyst, SAMCO Securities. “A buy on dip approach is reasonable as long as 55,500-55,450 holds on a closing basis,” he said.
Nifty Bank is trading below recent breakout zone. Immediate resistance is placed at 56,000, a level above which fresh momentum could be expected, said Mandar Bhojane, Senior Technical & Derivative Analyst at Choice Equity Broking. “On the downside, support lies near 54,995 at the 100 EMA. As long as the index remains capped below 56,000, its trend is likely to stay range-bound to weak compared with the Nifty,” it said.