Indian markets may start today in the red. The markets may see more selling by foreign portfolio investors. Yesterday, foreign investors were net selling Rs 2,511 crore in Indian stock markets. The government said rice prices are expected to rise further. This is negative news for food inflation and general inflation. Oil prices rose yesterday as the Iran nuclear deal appeared to be derailed.
US markets saw another day of weakness as technology stocks continued to weaken. The Nasdaq lost another 150 points. The Dow closed down 100 points. Recession pessimism from higher interest rates has led to sentiment at its worst since May. Bond yields are at a 14-year high of 3.60%. The US Dollar Index hit an all-time high of 111.5.
Asian markets opened in the red but are seeing early losses wiped out. Markets are now adjusting to the Fed’s view of inflation. Some market participants also assume that the bark is probably worse than the sting. Japan’s Nikkei index fell 100 points. The Nikkei is under pressure as the yen hit a new 40-year high against the US dollar. Taiwan and South Korea markets may see some comeback as auto demand sees momentum.
Nifty had another volatile day as the index swung over 200 pips before closing 88 pips lower. The sale of foreign ETFs caused significant volatility in the market. Bank Nifty was the main culprit as it lost over 800 pips on the day before closing down 570 pips. Power Grid, HDFC Bank, Axis Bank and HDFC were the biggest losers. HUL, Titan, Asian Paints and Maruti were the winners. Medium caps bucked the trend. The Nifty Small cap 50 index closed 0.60% higher.
Technical view: Nifty will likely find support around 17490. 17800 is likely to act as resistance on the upside. Bank Nifty is likely to find support around 40200. 41200 is likely to act as resistance.
Trading call (1-2 days): Buy Ultratech Cement September receiver @ 6250-6270. Stop Loss: 6134. Target: 6390
Derivative call – time period: (1 month): Bajaj Finserv September future sale @ 1770-1790. Stop Loss: 1815.5. Target: 1740