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Indian markets could open lower, in line with largely negative Asian markets today and mildly negative US markets on Tuesday- HDFC Securities

U.S. stocks finished lower Tuesday, after investors sifted through hotter-than-expected U.S. consumer-price index data and parsed quarterly results from some of the country’s biggest banks, including JPMorgan Chase & Co. and Goldman Sachs Group Inc. For the third time this year, shares of Apple Inc., Google parent Alphabet Inc., and Microsoft Corp. closed at record highs on the same day, underscoring their continued success despite a wave of Big Tech antitrust efforts.

The consumer price index in the US climbed 0.9% last month. The cost of used cars accounted for more than one-third of the increase, but prices for food, energy, clothing, plane tickets and hotels also rose sharply. The increase easily exceeded forecasts. Economists polled by The Wall Street Journal had estimated a 0.5% advance. The rate of inflation in the 12 months ended in June climbed to 5.4% from 5%. The last time prices rose that fast was in 2008, when oil hit a record $150 a barrel. The core CPI rose 4.5%, the sharpest move for that measure since September 1991 and well above the estimate of 3.8%.

Global shares dipped back from record highs on Tuesday as investors digested news of U.S. consumer prices rising by the most in 13 years, reinforcing expectations of tapering by the U.S. Federal Reserve. S&P Global Ratings on Tuesday affirmed India's sovereign rating at the lowest investment grade of 'BBB-' for the 14th year in a row with a stable outlook, and said that the country's strong external settings will act as a buffer against financial strains despite elevated government funding needs over the next 24 months.

Data expected today 12pm: India June wholesale price inflation YoY, est. 12.18%, prior 12.94% 2pm: India car sales data for June. Shares in Asia-Pacific mostly slipped in Wednesday morning trade following a hotter-than-expected U.S. inflation report for June overnight. India's equity benchmark indices broke a three session losing streak following positive Asian cues. At close, the Nifty 50 Index advanced 0.76% or 119.8 points to 15,812.35.

Nifty overcame the bearish signs of the candle formed on Monday and rose smartly. Positive advance decline ratio also gives bullish signals. With earnings season underway, investors will turn their attention to Infosys’s results that are expected to be posted on Wednesday and also watch the US CPI number due tonight. 15880-15727 could be the band for Nifty on Wednesday.

Daily Technical View on Nifty

Another attempt towards 15900..?

Observation: After showing higher level intraday weakness on Monday, Nifty witnessed sustainable upside bounce on Tuesday and closed the day higher by 119 points. After opening on an upside gap of 102 points, Nifty shifted into a range move for the better part of the session. Intraday dip of mid part was absorbed and gradual upside continued till the end of the session. Nifty closed near the highs and the opening upside gap remains partially filled.

A small body of positive candle was formed on Tuesday with long lower shadow and with unfilled opening upside gap. The negative implication of sell on intraday rise of Monday was nullified and Nifty closed higher on Tuesday.

The crucial intraday resistance of 15800 has been broken on the upside and the Nifty closed just above it, as per day's close. This is positive indication and signal more upside in the short term. Nifty is expected to revisit key overhead resistance of 15900-15915 levels of larger high low range in the next 1-2 sessions. In the last one month, the market has tested this hurdle for the three occasions and slipped into minor weakness from the highs in all the occasions.

Technically, such repeated hitting of the hurdle and minor decline from the highs could eventually result in a sharp upside breakout of the resistance.

Conclusion: The short term trend of Nifty continues to be positive with range bound action. One may expect further upside towards 15900-15915 levels in the short term before showing next round of consolidation. The emergence of strength at the hurdle could only open a sharp upside breakout of the resistance in the short term. Immediate support is placed at 15710 levels

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