By V K Sharma
As India builds its own table and invites countries for trade and investment talks, the US continues to throw spanners in the works despite presenting itself as a friend. Washington has revoked the sanctions waiver for the Chabahar Port that allowed India to develop the North-South Transport Corridor. These plans will now need reworking.
Adding to the concerns, President Trump on Friday signed an executive order restricting the entry of certain H-1B visa holders. The new rules require a $100,000 payment to accompany or supplement fresh H-1B petitions. While this will hurt companies operating in the US, it is unlikely to create new jobs for Americans.
Broader markets outpace benchmark
The Nifty is expected to open lower today. Last week, it gained 213 points, or 0.85%, to close at 25,327. The Nifty Midcap Index rose 1.49%, and the Nifty Smallcap Index surged 2.86%, comfortably outpacing the benchmark. Both indices have now advanced for 11 straight sessions, reflecting strong demand for broader market stocks. At the same time, such a continuous rally makes them vulnerable to a short-term correction. Any such move should, however, be viewed as a consolidation.
Indian markets have recovered from the April lows but still lag global peers. The MSCI World Index has rallied 36% from those levels, and the MSCI Emerging Market Index 36.5%. By comparison, the MSCI India Index is up just 19%.
Technical signals hint at caution
Technically, the Nifty is trading above key moving averages, forming higher tops and bottoms, with oscillators still bullish—signs of an intact uptrend. Yet, caution is warranted. On Thursday, the daily chart showed a hanging man pattern, a bearish signal. Friday added a red candle, and the market is likely to open weak today.
Support is seen around 25,150, with trendline support at 24,500. On the upside, a close above 25,500 would put the Nifty above a key downward-sloping resistance trendline, which currently caps the market.
(The author is a market veteran with 36 years of experience. He retired from HDFC Securities as head of PCG and capital market strategy)
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