Indian stocks markets are likely to open cautiously on Wednesday amid weak global markets, as rising treasury yields across the world indicate that interest rates are likely to rise sooner than expected. Besides, rising crude oil prices is also dampening sentiment of equity investors who fear that this will trigger another round of inflationary pressures.

At 7.30 am, the SGX Nifty was ruling at 18,115 as against Nifty futures’ closing of 18,124.35 (on the NSE). However, analysts expect Indian markets to swim along with global tide, as most Asian markets are down. Japan’s Nikkei is down over one per cent while rest of the equities in the region are down between 0.4 per cent and one per cent.

Global stocks wobble

Global equity markets are struggling even as the 10-year US treasury yields jumped to 1.87 per cent, the highest in two years as traders are expecting a more hawkish Federal Reserve ahead of a policy meeting next week.

US stocks fell on Tuesday, led by technology stocks and Goldman Sachs, which posted its quarterly profit that failed to meet Street expectations.

According to IFA Global Research Academy, market participants do not expect an interest rate hike next week, but are anticipating that the central bank will start policy tightening in March.

Prashant Tapse, Vice-President (Research) at Mehta Equities, said: "Although, investors will keep bullish hopes alive from the Union Budget, the commanding attention would be on the two-day FOMC meeting beginning January 25th. The fear in the market is that the Fed is likely to raise rates on back of rising inflation in US and worldwide."

Rupak De, Senior Technical Analyst at LKP Securities, said: “On the daily charts, Nifty has formed a bearish engulfing pattern. A bearish harmonic pattern is also visible on the daily chart of Nifty. Momentum oscillator RSI (14) has entered in a bearish crossover. On the higher end, resistance is visible at 18,350-18,400; whereas on the lower end, support is visible at 18,000/17,850”.

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