IGI Logo

Indian markets could open flat to mildly lower, in line with mixed and rangebound Asian markets today and mixed US markets on Wednesday - HDFC Securities

U.S. stock benchmarks recovered some ground Wednesday, following the worst selloff for the S&P 500 index in roughly four months, after climbing bond yields spooked investors already bracing for the Federal Reserve’s planned wind down of easy-money policies as the economy recovers. Stocks pared most of their gains into the close as a rally in technology companies fizzled out. Benchmark U.S. Treasury yields edged higher for a seventh straight day, putting the yield on the 10-year Treasury near 1.54%.

On the data front, U.S. pending home sales rose 8.1% in August, compared with July (vs 0.4% gain expected). Investors remain wary as Democrats and Republicans are deadlocked over a funding package needed to prevent a government shutdown. Without any action to raise the U.S. debt limit, the Congressional Budget Office estimated the U.S. likely will run out of money near the end of October or early November, slightly further off than U.S. Treasury Secretary Janet Yellen’s Oct. 18 estimate.

An official gauge of China’s factory activity tumbled into contractionary territory in September for the first time since February 2020, when the world’s second largest economy was hit hard by the coronavirus pandemic. The official manufacturing purchase managers’ index fell to 49.6 in September, compared with 50.1 in August. China’s official nonmanufacturing PMI bounced back to 53.2 in September, compared with 47.5 in August, as the new wave of coronavirus infections was quickly put under control. The China Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 50.0 in September from 49.2 the month before, versus analyst expectations of 49.5 in a Reuters poll.

Data To Watch 4pm: India fiscal deficit in rupees for AprilAug. period, 5:30pm: Eight Infrastructure Industries Index for Aug. India Q2 BoP Current Account Balance, FTSE Russell to Release Results of Index Review on Sept. 30 Asian stocks were off to a muted start after U.S. equities pared most of their gains as a rally in technology shares petered out.

Nifty ended lower for the second consecutive day on Sept 29 after a rollercoaster ride. At close Nifty was down 0.21% or 37 points to 17711. Nifty shows volatility at higher levels and buy the dip behaviour is observed among market participants as there is no follow through sell-offs. Advance decline ratio has improved to above 1:1 and broad market indices like smallcap and midcap indices ended in the positive outperforming the Nifty. 17576-17802 could be the range for the Nifty over the near term.

Daily Technical View on Nifty

Nifty : Sell Nifty Below 17600

* Nifty ended the session with the loss of 37 points, to close at 17711.

* Nifty has been finding support on its 13 days EMA for last 2 consecutive sessions

* At Present 13 days EMA is placed at 17693, which can act as a reversal point

* RSI on the daily charts has formed negative divergence, which could be advance signal of bearish trend reversal.

* 14 Days RSI is placed at 69 and the previous swing bottom was seen at 68 odd levels. Any level below 68 for Nifty daily RSI would result in to bearish trend confirmation.

* Daily MACD has also been sustaining below its signal line, which is bearish sign

* Pharma and IT Sectors can be traded with positive bias.

* It would advisable to cut longs if Nifty breaches the crucial support of 17600

* Fresh shorts could also be initiated below 17600, for the target of 17450, keeping SL at 17700

Nifty – Daily Timeframe chart

To Read Complete Report & Disclaimer Click Here

Please refer disclaimer at https://www.hdfcsec.com/article/disclaimer-1795

SEBI Registration number is INZ000171337

Views express by all participants are for information & academic purpose only. Kindly read disclaimer before referring below views. Click Here For Disclaimer