The Indian stock market is expected to open lower today, influenced by weakness in both Asian and US markets. The Federal Reserve‘s hawkish signals have raised concerns about rising interest rates to combat inflation, leading to a decline in US treasury yields and a decrease in investor appetite for risky assets. Additionally, signs of economic stress in China have further dampened investor sentiment.
Global Factors Impacting Indian Markets
US Stock Market Decline: US stock indices closed lower on Wednesday after the minutes of the Federal Reserve’s latest policy meeting revealed a division among FOMC members regarding the need for more interest rate hikes. The S&P 500 fell 0.76%, the Nasdaq Composite declined by 1.15%, and the Dow Jones Industrial Average ended 0.52% lower.
Rising US Treasury Yields: The release of the Federal Reserve’s July meeting minutes led to a surge in the benchmark 10-year US Treasury yields to a 10-month high of 4.280%. This rise in yields is driven by concerns about ongoing interest rate hikes and significant upside risks to inflation.
Asian Market Decline: Asian markets followed the negative trend, with Japan‘s Nikkei 225 falling by 0.45%, South Korea‘s Kospi declining by 0.70%, and Hong Kong‘s Hang Seng index futures trading around 265 points lower.
Indian Market Dynamics
Recent Volatility: Despite marginal gains in the benchmark indices, Sensex and Nifty, the Indian market has experienced volatility due to weak global cues, including the slowdown of the Chinese economy and Fitch’s warning about potential downgrades of US midsized banks. Domestic factors, such as sharp inflation data and weak monsoon progress in August 2023, have also contributed to the volatile sentiment.
Immediate Support and Resistance Levels: The current technical analysis indicates that the market’s strong cluster resistance is situated around 19550-19600 levels, marked by a down-sloping trend line and the daily 10/20-day exponential moving averages (EMA). Immediate support is found around 19250-19300 levels.
FIIs and DIIs Activity: Foreign Institutional Investors (FIIs) broke their selling streak on Wednesday, while Domestic Institutional Investors (DIIs) were major buyers, investing ₹2,406 crore during the session. DIIs also registered an inflow of ₹2,406.19 crore.
F&O Ban List: Stocks in the F&O ban list for the day include Indiabulls Housing Finance, Delta Corp, GNFC, Balrampur Chini Mills, Chambal Fertilisers & Chemicals, India Cements, Granules, ZEEL, Manappuram, Hindustan Copper, and SAIL.
Oil Price Movement: Oil prices extended their decline for a fourth consecutive session on fears of slowing growth in China and possible further US interest rate hikes. Brent crude futures fell 0.44% to $83.08 a barrel, while US West Texas Intermediate crude (WTI) was down 0.49% to $78.99 a barrel.
Market Opening Forecast
GIFT Nifty on the NSE IX traded 71 points or 0.36% lower at 19,400, signaling a negative start for Dalal Street on Thursday.
Note: The financial information provided here is based on available data and should not be considered as financial advice. Always refer to authoritative sources and consult with financial professionals before making investment decisions.