Early trends in the SGX Nifty hint at a flat to negative opening for Indian benchmark indices. The Nifty futures are trading marginally lower at around 18,029 levels on the Singapore exchange. In the previous session, BSE Sensex fell 304 pts to 60,353, while NSE Nifty 50 slipped below the psychological level of 18,000. “Markets have been drifting lower amid mixed signals from the global front however the pace of decline is gradual, thanks to rotational buying in select index majors from across sectors. Technically, Nifty has retested the crucial support of medium term moving average i.e. 100 EMA on the daily chart and indications are pointing toward the negative bias to continue. Amid all, we recommend continuing with stock-specific approach while keeping a check on the position size,” said Ajit Mishra, VP – Technical Research, Religare Broking.
Key things to know before market opening bell
Global market watch: Markets in the Asia-Pacific traded mostly higher as the US Fed signaled further rate hikes ahead. Japan’s Nikkei 225 rose 0.4% and the Topix inched up 0.2%. South Korea’s Kospi gained 0.75%, and Hong Kong’s Hang Seng index rose 0.6%. In mainland China, the Shanghai Composite was marginally up, while the Shenzhen Component fell 0.1%. Overnight in the US, stocks fell and the Dow Jones Industrial Average fell 1.02%, the S&P 500 shed 1.16%, and the Nasdaq Composite slipped 1.47%. All three Wall Street averages are on track to notch five weeks of losses.
Nifty technical view: “A reasonable negative candle was formed on the daily chart with long lower shadow. Technically this pattern indicates downside continuation pattern amidst volatility. The upside recovery of Thursday signal that buying is expected to emerge from near the lower support of around 17750-17800 levels. Negative chart pattern like lower tops and bottoms continued on the daily chart and the Nifty is expected to revisit the recent swing lows of 17775 levels in the short term. Any upside bounce from here could encounter resistance around 18100 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Key Levels to watch: “Nifty is witnessing sell on rise as Index needs to sustain 18250 for next upside rally. Volume profile indicates that index may find support around 17800 zone. On the other hand, Bank Nifty has support at 42200-42000 zone while resistance is placed at 43400. The long-term investor’s investment strategy may appear to have shifted slightly, with selective mid-cap and small-cap equities currently looking appealing,” said Om Mehra, Equity Research Analyst, Choice Broking.
FII and DII data: Foreign institutional investors (FII) sold shares worth Rs 1,449.45 crore, while domestic institutional investors (DII) offloaded shares worth Rs 194.09 crore on 5 January, according to the provisional data available on the NSE.
Stocks under F&O ban on NSE: The National Stock Exchange has added Indiabulls Housing Finance to its F&O ban list for 6 January. According to the NSE, the stocks under the ban are prohibited in the F&O sector because they have exceeded 95% of the market-wide position limit (MWPL). During the F&O ban period, no new positions are permitted for any F&O contracts in those stocks.
Crude oil rises: Oil prices rebounded on Thursday amid dollar weakness and as investors emerged to buy dips after two sessions of steep losses, though economic concerns capped recovery. Brent crude futures had climbed 75 cents, or 1.0%, to $78.59 a barrel by 0400 GMT, while US West Texas Intermediate crude futures rose 77 cents, or 1.1%, to $73.61 a barrel.
US trade deficit shrinks: The US trade deficit contracted by the most in nearly 14 years in November as slowing domestic demand amid higher borrowing costs depressed imports. The trade deficit decreased 21.0% to $61.5 billion, the lowest level since September 2020, the Commerce Department said on Thursday. The percentage decline in the trade gap was the largest since February 2009. Imports tumbled 6.4% to $313.4 billion, with goods dropping 7.5% to $254.9 billion. Consumer goods imports were the lowest since December 2020.