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Indian markets could open mildly higher, following mixed Asian markets today and mixed but weak tech space in US markets on Monday - HDFC Securities 

US stock-market benchmarks ended mostly lower Monday, while the Dow Jones Industrials benchmark eked out modest gains, amid worries that rising bond yields could render equities too expensive. Higher “risk-free” yields can make it difficult to justify high valuations for equities, as it reduces the value of their future profits to investors

U.S. crude oil futures climbed $2.44, or 4.1%, to settle at $61.70 a barrel on the NYME, lifting shares of energy-related companies. Oil prices rose on a tight global supply outlook after U.S. production was hammered by frigid weather and an approaching meeting of top crude producers is expected to keep output largely in check. Gold futures climbed $31, or 1.7%, to settle at $1,808.40 an ounce

A historically hefty advantage that the S&P 500 dividend yield has held over the benchmark U.S. Treasury note is on the verge of disappearing, a year after the collapse in interest rates set the stage for Wall Street's recovery from the pandemic sell-off.

The yield on the 10-year note is as high as 1.394% overnight, the highest since February 2020. That compares with the S&P 500's dividend yield of about 1.46%. The S&P 500 dividend yield in late March reached 2.76%, a historically large premium over the 10- year Treasury yield of0.76% at that time.

On Monday, European Central Bank President Christine Lagarde said in a speech that the central bank is “closely monitoring the evolution of long-term nominal bond yields.” European sovereign bonds yields moved lower in response to her remarks. Federal Reserve Chair Jerome Powell is scheduled to speak before the Senate Banking Committee on Tuesday, and investors are expected to look for any potential changes to the central bank's dovish outlook.

Brazil's benchmark Bovespa index tanked almost 5% on Monday as oil major Petrobras plummeted 21% following the ouster of its investor-backed chief executive. Brazil's real fell as much as 2.8%, hitting lows not seen since November last year.

Asian stocks were mixed on Tuesday as rising US Treasury yields and inflation prospects led to a further rotation out of the big tech stocks responsible for a major Wall Street rally during the pandemic.

Indian benchmark equity indices fell the most in two months on Feb 22, ending lower for the fifth consecutive session. At close, the Nifty 50 index fell 2% or 306 points to end at 14,675.7.

Daily Technical View on Nifty

Observation: Markets ended with hefty losses on Monday after a negative opening. The index witnessed selling through the day after a small pullback in the morning session. The Nifty finally lost 306.05 points or 2.04% to close at 14,675.7.

Broad market indices like the BSE Mid Cap and Small Cap indices lost less, thereby out performing the Sensex/Nifty. Market breadth was negative on the BSE/NSE.

Zooming into the Nifty 15 min charts, we observe that the Nifty opened marginally lower and witnessed a recovery from the lows in the morning session. But selling soon resumed and pushed the index lower through the day.

With the index also trading below the downward sloping 20 and 50 period moving average on the 15 min intra charts, the bias seems to be negative for the very near term. We expect the Nifty to test the next major support of 14345 in the very near term

On the daily chart, we can observe that the Nifty has now reversed its recent uptrend by closing below the recent support of 14977. In the process, the Nifty has also closed below the 20 day SMA. Short term momentum indicators like the 14-day RSI are diving sharply indicating a rapid loss in momentum.

While we remain open to pullback rallies, we expect the index to move down further in the coming sessions. We would not be surprised if the Nifty breaks the 50 day SMA currently at 14345 and moves down further towards a trend line support at 13780.

Conclusion: The 1-2 day trend of the Nifty remains down with the Nifty closing below an intraday trend line and also below a downward sloping 20 and 50 period MA on the 15 min intra chart. Nifty is likely to test the 14345 levels in the very near term.

Our 7-day view on the market too is bearish with the Nifty reversing the recent uptrend and closing below the 20 day SMA. With the downward momentum gathering pace, we would not be surprised if the Nifty breaks the 50 day SMA at 14345 and moves down further towards a trend line support at 13780 .

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