SGX Nifty indicates a firm opening for domestic markets

K. S. Badri Narayanan | Updated on: Jul 06, 2022

Nifty found resistance at 16,000 and has formed a long-leg bearish candle formation near that level

Domestic equities are likely to witness volatility on Wednesday as global markets continue gauge the impact of falling commodity and crude oil prices. Analysts said, on the one hand the inflationary pressures are easing while on the other the dollar index is ruling firm giving mixed signal.

One positive signal is that the foreign portfolio investors have turned net buyers on Tuesday. Though it’s too early to comment whether FPIs have changed hearts, analysts believe that their intensity of selling will be reduced 

Overnight, the US stocks saw one of the strong recoveries after opening over 2 per cent lower 

SGX Nifty at 15,800 indicates firm opening for domestic markets while equities across Asia Pacific region is mixed.

According to Siddharth Khemka of Motilal Oswal,  Nervousness ahead of the US Fed meeting minutes as well as expectation of weakness in the upcoming results season made investors to book profits. Even the Indian rupee touched a new record low adding to the overall weakness in the market.

Nifty briefly crossed 16,000-mark but lost momentum in the last hour with selling pressure witnessed in IT, Banking and Auto stocks. Markets would continue to track global cues and pre-quarterly updates in the near term. The result reason which would be a key driver for the market would start with TCS announcing its results on Friday.”

Domestic macroeconomic numbers continue to remain strong. India’s services activity expanded again in June, with the S&P Global India Services Purchasing Managers’ Index (PMI) coming in at 59.2, the highest since April 2011. In May, the services PMI was 58.9.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd, said technically, “the Nifty found resistance near 16,000 and has formed a long leg bearish candle formation near the important resistance level. For the bulls now, the 20-day SMA (Simple Moving Average) or 15,750 would be the key support level. Below it, the index could slip to 15,700-15,650 levels.”

Published on July 06, 2022
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