The domestic markets are expected to open in negative territory and reman volatile today as it is the settlement of the F&O segment on the NSE. 

US stocks remain under pressure as the debt ceiling talks drag on. They have been on the decline after Wall Street was hit by a one-two punch of rising debt default risks and fears that inflation might not allow the Fed to pause its tightening cycle.

Also Read: BL Explainer: What if US debt ceiling is not raised?

“The FOMC minutes showed that officials are split on continuing with rate hikes and that they will remain data dependant. Rate cuts are unlikely, but it seems policymakers won’t be taking on any major stance until the debt limit is raised. If inflation ends up being stickier than economists expect, the Fed could well skip a June rate hike, but follow-through with one in the July meeting,” said Edward Moya. Senior Market Analyst at The Americas OANDA.

Also read: Simply Put: Sovereign Default

SGX Nifty at 18,240 indicates a gap-down opening, as Nifty May futures closed at 18,295.90 and June futures at 18,384.80.

Global equities retreated as worries over China’s economy, sticky inflation in Europe and the impasse in US debt-ceiling negotiations continued to weigh on sentiment, said Deepak Jasani, Head of Retail Research, HDFC Securities. 

Meanwhile, stocks in the Asia-Pacific region were mixed in early deals on Thursday. While the Japanese and Chinese markets are trading flat, Australian stocks are down by about 0.8 per cent, even as the Taiwan markets eked out marginal gains.

“Domestic markets have paused, with Nifty facing minor resistance in the higher 18,400-450 zones. However, the overall positive structure remains intact, with the view being buy on dips. Globally, investors would also take direction from the Fed meeting minutes to be released later today,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Today being the settlement day for May contracts on the NSE, analysts expect stock-specific action to continue due to roll-overs. Besides, strong buying by foreign portfolio investors would keep the market in a range.

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities, said: The Nifty index has been firmly held by bears, indicating their control over the market. The index faces significant resistance at 18400, which has proven to be a challenging barrier to overcome. “The ongoing battle between bulls and bears has resulted in the index trading within a consolidated range between 18200 and 18400 levels. However, a break above or below this range has the potential to trigger trending directional moves. Traders and investors should closely monitor the index for a potential breakout or breakdown, as it may indicate a shift in market sentiment and the beginning of a new trend,” he added.

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