Indian markets are likely to open the session on Friday with downward bias, tracking weak global cues. Firm inflation across the globe and selling by foreign portfolio investors are likely to keep market under pressure, said analysts.
Indian markets now await fresh positive triggers.
Global stocks were mostly lower on Thursday after notes from a US Federal Reserve meeting dented hopes of the end of interest rate hikes. Fears over China’s sluggish economic recovery did not help matters either, said Deepak Jasani, Head of Retail Research, HDFC Securities.
Gift Nifty 19303 indicates a gap down opening of another 100 points for Nifty. Analysts now expect market to remain in consolidation phase with downward bias. This is a healthy correction, they added. Equities across Asia-Pacific region are down around 0.5 per cent. Trends in Gift Nifty indicates that Nifty may soon dip below 19,300 said analysts.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, said, “Indian equities succumbed to global volatility following the hawkish tone of the FOMC minutes meeting and worries over the risk of a downgrade in China’s sovereign credit rating by Fitch. Adding to the negative sentiment, the rupee depreciated to near a 10-month low at 83.14 and the FIIs outflow of almost of ₹10,000 crore in August so far also led to selling at higher levels. In the near term, there will be uncertainty in the market following the fragile global cues that could cap the upside.”
According to analysts, broader market of Nifty Midcap and Nifty SmallCap will remain relatively stable.
India’s midcap stocks have started to witness interest among overseas investors after five years of decline, according to Goldman Sachs Group Inc. “We are seeing a sharp reversal in foreigners’ ownership of India midcaps,” strategists including Amorita Goel and Sunil Koul wrote in a note Wednesday, citing their analysis of second quarter shareholding data.
On technical charts too, the market has turned negative, said analysts.
Rupak De, Senior Technical analyst at LKP Securities, said: “The Nifty index displayed volatility throughout the session due to the expiration of weekly options. The prevailing sentiment stays negative as the index continues to stay below the crucial moving average. Looking at the upper range, the sell-on-rise approach might be more effective as long as the level of 19525 remains unbroken. On the downside, levels around 19250 serve as immediate support in case of any decline.”
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