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Indian markets could open flat to mildly lower, in line with mostly lower Asian markets today and despite sharply higher US markets on Tuesday - HDFC Securities

U.S. stocks closed off their best levels Tuesday but managed to regain a chunk of ground lost, after Monday’s slump led by the technology sector. Gains took fuller flight early Tuesday after upbeat readings on activity in the U.S. services sector for September and as COVID-19 cases were seen in decline following a summer surge. Rising oil and natural-gas prices helped boost the S&P 500’s energy sector. ISM said its services index rose to 61.9 in September from 61.7, coming in above forecast. US trade deficit rose 4.2% to $73.3 billion in August.

Ratings agency Moody's hiked India's sovereign credit rating outlook to stable from negative, citing an improvement in the financial sector and faster-than expected economic recovery across sectors and based on its view that the downside risks from negative feedback between the real economy and financial system are receding. Moody's expects India's real GDP to surpass 2019 levels this fiscal year, rebounding to a growth rate of 9.3 percent, followed by 7.9 percent in fiscal 2022.

The Reserve Bank of New Zealand on Wednesday raised its official cash rate to 0.5%, joining South Korea and Norway in being among the earliest countries to raise rates in the pandemic era. In neighbouring Australia, the central bank held interest rates at a record low 0.1% for an 11th straight month on Tuesday.

The International Monetary Fund expects global economic growth in 2021 to fall slightly below its July forecast of 6 per cent, citing risks associated with debt, inflation and divergent economic trends amid the COVID-19 pandemic. The global economy was bouncing back but the pandemic continued to limit the recovery, with the main obstacle posed by the "great vaccination divide" that has left too many countries with too little access to COVID-19 vaccines.

Asian shares dropped on Wednesday, reversing early gains, after an overnight rebound in U.S. and European stocks as investors shrugged off worries about a potential U.S. government debt default, while oil paused near new multi-year highs.

Nifty closed in the positive for the second consecutive day on Oct 05. At close Nifty was up 0.74% or 131 point to 17822.

Nifty closed at almost the intra day high with high volumes and positive advance decline ratio. Nifty shows good momentum. The next resistance for the Nifty is 17912-17948 while the support is at 17711.

Daily Technical View on Nifty

Buy Nifty by keeping stop loss at 17700 level.

* Observation: Nifty recovered smartly from early losses and finally closed at 17828.30 up by 0.77%.

* Nifty has made higher top higher bottom formation from last 3 sessions with one up-gap suggesting bullishness in the Index.

* Previously Index has taken support on 21 EMA and bounced back. The index has also started trading above the downward slopping trend line, suggesting bullishness for the Index.

* 14 days RSI on the daily chart is on verge of turning up and currently trading near 67.50 level.

* Above all technical parameter suggests Index may move higher towards its all-time high level.

* In sector-specific Oil & Gas and Chemical rose the most and Cement and Realty fell the most. Conclusion: Traders can create a fresh long position by keeping a stop loss at the 17700 level.

Nifty – Daily Timeframe chart

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