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

U.S. stock indexes closed lower, but off Wednesday’s worst levels, as Wall Street reacted to Federal Reserve Chair Powell’s optimistic tone on the U.S. economic recovery and a slightly “hawkish” policy update that raised inflation forecasts and brought forward the timing of an interest rate rise. Stocks finished lower after the Fed left its easy monetary policy stance unchanged, but signaled the central bank expects to hike rates twice in 2023, and raised its inflation forecast, as part of its April policy statement update.

The Fed said it would keep its bond purchases unchanged at $80 billion of Treasurys and $40 billion of mortgage-backed securities each month. The Fed also said it would slightly raise the overnight borrowing rate it pays banks and others to park cash temporarily with the central bank, and bumped up the rate it pays on overnight reverse repurchase agreements, a program that has seen a surge in demand recently.

In its statement, the Fed stuck to its guns and said the recent burst of inflation would be transitory. At the same time, it acknowledged that inflation would be much higher this year, raising its forecast for headline PCE inflation to 3%.The Fed cited an improved economic outlook, with overall economic growth expected to hit 7% this year. The Fed signaled it would now be considering whether to taper its asset purchases meeting by meeting and downgraded the risk from the pandemic given progress in vaccination.

Sales of India's two most-used road fuels – petrol and diesel - rose as much as 13% in the first half of June from the same period last month, according to people familiar with initial data from the three biggest retailers. That’s the first monthly increase since March.

Brazil’s central bank delivered its third consecutive interest rate increase of 75 basis points on Wednesday to 4.25% and raised the specter of larger hikes ahead as it returns to “neutral” rates, dropping plans for a “partial” normalization of policy. Asian stocks opened lower Thursday after Federal Reserve officials stunned investors by signalling it might raise interest rates at a much faster pace than assumed, sending yields and the dollar sharply higher.

Indian Benchmark equity indices broke a four day winning streak and retreated from record highs following weak Asian cues and ahead of the US Fed meet outcome. At close, the Nifty ended 101.7 points, or 0.64 percent, lower at 15,767.55.

Nifty fell ahead of the US Fed meeting as traders brought down their positions ahead of the event. This is also reflected in low volumes and sharply negative advance decline ratio. The market might be reluctant to push higher ahead of the Fed meeting beyond a point. While economists don’t expect the US Fed to alter rates or cut bond buying immediately, any indication of an earlier than expected roll back of stimulus may dampen sentiments. 15611-15835 is the band for the near term for the Nifty.

Daily Technical View on Nifty

Nifty : Time to Be Cautious

Nifty witnessed a fall of 0.64% to settle below 15800. The fall is preceded by the “Doji” candle stick pattern which was formed on 15th June. Formation of “Doji” could result in short term bearish trend reversal. However, unless we see Nifty breaking crucial support, we should not take aggressive bearish view. Previous swing low is placed at 15566, which can act as a support in short term. Any level below 15566 would confirm the price trend reversal and in that case longs should be cut.

Below 15566, traders can initiate fresh short positions with 15800 stoploss. RSI oscillator has exited the overbought zone and is on the verge of confirming the sell signal below previous swing low levels Traders are advise remain cautious at this level as breaking of support in Nifty could end up in healthy correction Unless We see Nifty closing above 16850, aggressive longs are not advisable From the sectors FMCG and IT looks the strongest for the day, while Auto, Commodities and Metals could underperform.

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