The SGX Nifty signaled that domestic benchmark indices NSE Nifty and BSE Sensex might open in the red, as Nifty futures traded 73 points lower at 18,087.5 on the Singaporean exchange after the US Federal Reserve hiked their key lending rate by 25 bps. Benchmark indices NSE Nifty and BSE Sensex ended Wednesday’s session lower, snapping a six day gaining streaking. The NSE Nifty 50 fell 0.3% points to 18,090 and Sensex ended lower by 75 points to settle at 61,193.
“The 6-day winning streak of the domestic market was disturbed by adverse headwinds from the US market. Renewed concerns over the US regional banking turmoil, uncertainty regarding the Fed’s policy outcome, and the need to increase the US treasury debt borrowing limit triggered a bearish attack on Wall Street. Despite this, the robust growth of India’s services and manufacturing sectors in April and the strong inflow of foreign funds helped minimise the losses in the domestic market,” said Vinod Nair, Head of Research, Geojit Financial Services.
Key things to know before share market opens
Wall Street
U.S. stocks ended lower on Wednesday, reversing gains after comments by Federal Reserve Chair Jerome Powell left investors wondering what the U.S. central bank’s next move would be with interest rate hikes. Indexes initially held onto gains following the Fed’s statement, according to Reuters. The Dow Jones Industrial Average fell 0.8%, the S&P 500 slipped 0.7% while the Nasdaq Composite slid 0.5%.
US Fed raises rates
The US Federal Reserve hiked interest rates by 25 bps, as the market predicted while signaling that the rate hike cycle might be paused. The decision to hike the key lending rate was taken unanimously by the FOMC members, taking the overnight interest rate to the 5-5.25% range. This hike marks the tenth consecutive increase since March 2022.
Asian Markets
Shares in Asia-Pacific traded mixed on Thursday. Japan’s Nikkei 225 remained closed. China’s Shanghai Composite gained 0.5% while the Shenzhen Component fell 0.4%. Hong Kong’s Hang Seng gained 1.27%, while Taiwan’s TSEC 50 added 0.21%. South Korea’s Kospi declined 0.34%.
Crude Oil
Oil prices fell over 1% on Thursday, deepening steep losses in recent days, after the U.S. Federal Reserve increased interest rates and investors worried about a weakening global economy that could dent energy demand. Brent futures fell 76 cents, or 1.1%, to $71.57 a barrel by 0002 GMT. U.S. West Texas Intermediate crude (WTI) fell $1, or 1.5%, to $67.60 a barrel. This marked the lowest settling figure for both benchmarks since December 2021. Both Brent and WTI have fallen over 10% since the start of this week.
FII/DII Data
Foreign institutional investors (FII) bought shares worth net Rs 1,338 crore, while domestic institutional investors (DII) offloaded shares worth net Rs 583.99 crore on May 3, according to the provisional data available on the NSE.
F&O Ban
The National Stock Exchange has Manappuram Finance securities on its F&O ban list for 4 May. According to the NSE, stocks are prohibited in the F&O sector when they have exceeded 95% of the market-wide position limit (MWPL). During the F&O ban period, no new positions are permitted for F&O contracts in that stock.
Bank Nifty Outlook
“The short-term range for Bank Nifty remains intact at 43,000-43,500. A decisive move on either side may induce a directional move in the index. Immediate support is visible at 43,150. On the other hand a move above 43,500 may induce a rally towards 44,000,” said Kunal Shah, Senior Technical & Derivatives Analyst at LKP Securities.
Technical View
“The short term trend of Nifty seems to have cooled off after a decent upside movement. There is a possibility of further consolidation or minor weakness for the next 1-2 sessions before showing upside bounce from the higher lows. Immediate support is at 17,900 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Currency Outlook
“The Fed announced that further monetary policy decisions would be highly dependent on incoming data. Accompanying statement drops wording that additional policy firming may be appropriate, triggering USD and 10Y UST yields sell-off. Eyes on ECB policy meeting due today. For USDINR, 81.50 acts as a support while 81.85 is a resistance,” said Kunal Sodhani, VP, Global Trading Center, Shinhan Bank.
Levels to Watch
“OI Data indicates, on the call side the highest OI witnessed at 18,200 followed by 18,300 strike prices while on the put side, the highest OI remains at 18,000 followed by 17,900 strike price. Nifty Put Call Ratio stands at 1.02. On the other hand, Bank Nifty has support around 42,800-43,000 zone while resistance is placed at 43,800. One can look at quality stocks in the mid and small cap segment,” said Om Mehra, Equity Research Analyst, Choice Broking.