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Domestic markets are expected to open weak on Thursday, as global stocks decline for the first time in 2022. The US Fed's hawkish stance has rattled stock markets across-the-board. Besides, rising US yield and volatile rupee are adding to the pressure, said analysts.
The SGX NIfty at 17,797 signals that markets are likely to see a gap down opening of about 150 points, as Nifty futures on Wednesday closed at 17,946.
The minutes of US Fed's December 14-15 was out on Wednesday that revealed its hawkish stance. According to the minutes, the US Fed policymakers are said to raise rates sooner and begin reducing overall asset holdings due to a very tight job market and unabated inflation.
Nasdaq tumbles over 3%
Equities across Asia-Pacific are down about between 0.5 and 1.3 per cent, with Japan's Nikkei leading the decliners falling 1.5 per cent. US stocks too slumped, especially, the Nasdaq pruning over 3.34 per cent. S&P 500 and Dow Jones were down about 2 per cent and 1 per cent respectively.
Though the Indian benchmarks have so far maintained the winning streak in 2022, the rising volatility index above 17 also captures the underlying nervousness in the market. While the US 10-year Treasury yields rose to 1.68 per cent level, the rupee is hovering between 75.30-75.60 level.
According to Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, the market trend might be volatile in the near term on account of potential risk from the Omicron variant, upcoming budget and fragile global cues. However, in the long run, strong earnings delivery along with positive macro-economic data would hold the key to drive markets upwards, he added.
Ruchit Jain, Lead Research, 5paisa.com, said: "The overall trend for Nifty still continues to be positive, but the index has entered a crucial zone now. For the near term, 17,970 followed by 18,050 are the immediate term hurdles and we could see either some price-wise or a time-wise correction to relieve the overbought momentum set-ups. Hence, short term traders can look to take some money off the table around the resistance and look for buying opportunities again on declines.
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