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Below is the Views On Morning outlook by Mr. Deepak Jasani, Head of Retail Research, HDFC securities
Indian markets could open mildly higher on Friday following flat US markets on Thursday and positive Asian markets this morning. They could later run into resistance/ profit taking at higher levels.
U.S. stocks closed higher Thursday, recovering from early losses, after New York Federal Reserve President John Williams said the central bank’s wisest strategy is to cut interest rates at the first sign of economic distress when interest rates are already low.
In commodities markets, the price of U.S. crude oil fell nearly 3.0% to $55.30 per barrel, its lowest level in a month, while gold was up 1% around $1,437.80 after seeing a new six-year highs this month.
Asian stocks gained and the dollar sagged on Friday after a top Federal Reserve official all but cemented expectations of a U.S. interest rate cut later this month.
New York Fed President John Williams said on Thursday that policymakers need to add stimulus early to deal with too-low inflation when interest rates are near zero and cannot wait for economic disaster to unfold Indian markets ended sharply lower on Thursday. Losses came after three consecutive sessions of gains for the Nifty. The losses came on the back of weak global cues after reports that trade negotiations between US and China are at an impasse over restrictions on Chinese tech giant Huawei. The Nifty index ended 90.6 points or 0.78% lower at 11,596.9.
Indian markets could open mildly higher on Friday following flat US markets on Thursday and positive Asian markets this morning. They could later run into resistance/ profit taking at higher levels. Technically, with the Nifty correcting sharply, the bears seem to have made a comeback. Further downsides are likely once the immediate support of 11582 is broken. Any pullback rallies could find resistance at 11677.
PSU and Auto indices could underperform. Last week Nifty closed at 11552. It would be interesting to see whether Nifty closes with a week-on week gain. Among stocks under coverage, HDFC Life, Colgate, United Spirits, SIS Rites could do well.
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