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Domestic stock market is likely to open on a muted note amid weak global cues.
SGX Nifty at around 15700 (7am), down over 40 points from Nifty Futures’ Wednesday close indicates a flat to negative start for the Indian markets.
US markets remained mixed and little unchanged. The Dow climbed 0.27 per cent, while the S&P 500 and the tech heavy Nasdaq slipped to end flat, down 0.07 percent and 0.03 per cent, respectively. Investors remained cautious after Federal Reserve Chair Jerome Powell hinted that there was no guarantee the Fed can engineer a “soft landing.” Further, the US Q1 GDP’s higher than expected fall added to the negative sentiment. Asian markets were also trading in red in the early session.
On the domestic front, the market is expected to remain volatile ahead of the June F&O settlement today.
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Prashanth Tapse, Vice President (Research), Mehta Equities Ltd said, “Volatility is likely to be a hallmark of Thursday’s trade as traders will roll out June F&O contracts to July series. Investors will also react to a speech from the Federal Reserve Chair Jerome Powell and the US GDP first-quarter report.”
Ajit Mishra, VP-Research, Religare Broking Ltd said, “Markets will react to the US GDP data in early trades and then the focus would shift to the monthly derivatives expiry. While the Nifty has been hovering around its crucial hurdle of 15,900, the recent decline in the banking index is pointing towards more pain ahead.”
Technical perspective
From a technical perspective, according to Ruchit Jain, Lead Research, 5paisa.com, “The (Nifty 50) index has decent support around 15,700 followed by 15,600 levels and till these supports are intact, there’s a higher probability of a resumption of the positive momentum in the near-term. On the higher side, the 50 per cent retracement of the previous correction is seen around 15,990 and 61.8 per cent is around 16,180 which would be the levels to watch for. A move above 15,900 would be the first signs of the index marching towards the above given targets.”
Sahaj Agrawal, Head of Research-Derivatives at Kotak Securities said, “June series witnessed significant volatility and continues to trade with a negative bias below 15,930.”
“Medium-term outlook remains negative, while for the short-term we believe technical bounce back is possible on crossing of resistance levels. On the higher side, 16300-16500 is possible. Energy and select midcap stocks remain attractive. Metals continue to remain weak with high volatility,” added Agrawal.
Rupee
The rupee depreciated 18 paise to close at a record low of 79.03 (provisional) against the US dollar on Wednesday,
Sugandha Sachdeva, Vice-President-Commodity and Currency Research, Religare Broking Ltd said, “The Indian rupee has continued to move on the downhill journey since the beginning of the year, amid a backdrop of heavy foreign fund outflows from the domestic markets, strength in the safe-haven dollar towards two-decade highs, and firming crude oil prices.”
FIIs continue to sell
Consistent foreign fund outflows have also been weighing on investor sentiments.
According to NSE provisional data, foreign Institutional Investors (FIIs) net sold shares worth ₹851.06 crore on Wednesday, while Domestic Institutional Investors (DIIs) net bought shares worth ₹847.46 crore.
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