On Thursday morning, SGX Nifty was trading more than 100 points lower, hinting at a weak start for domestic equities.
Domestic equity markets took a breather on Wednesday and closed in the red, a day after touching fresh all-time highs. On the closing bell, S&P BSE Sensex was at 52,501 while the 50-stock NSE Nifty was 15,767. On Thursday, ahead of the weekly expiry session, SGX Nifty was trading nearly 100 points lower, hinting at a weak start for domestic equities. Global cues were also negative after Wall Street indices fell after US Fed signalled it would hike rates in 2023. Asian peers were under pressure during the early hours of trade.
US Fed outcome: US Federal Reserve decided to keep rates unchanged in its Federal Open Market Committee. However, the Fed said it anticipated two rate hikes by the end of 2023. Fed Chair Jerome Powell also said that officials would begin a discussion about scaling back bond purchases.
Global Watch: Wall Street did not take Fed’s decision lightly and closed in the red for the second day straight. Dow Jones finished 0.77% lower, followed by 0.54% fall in S&P 500 and a 0.24% slip was seen in NASDAQ. Asian peers were largely in the negative, except Shanghai Composite and KOSDAQ.
Technical take: Nifty formed a long negative candle after a doji type pattern at the new highs on Tuesday, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “This again raises concern over the sustainability of bulls at the new highs. At the same time, the market has failed to show any decisive declines beyond one-day weakness recently,” he added.
Levels to watch out: For Nifty to touch 16,000, the 50-stock index will need to open strongly above 15,830, according to Shrikant Chouhan, Executive Vice President, Equity Technical Research, Kotak Securities. “ In case the market opens lower and breaks the level of 15580/51850, then the chances of hitting 15500/15430 (51600/51400) would turn bright. As the major trend of the market is positive, our advice is to add long positions, if the market fell to major supports in the short term,” he said.
FII and DII trades: Foreign Institutional Investors (FII) were net sellers of domestic stocks on Wednesday, pulling out Rs 870 crore. Domestic Institutional Investors (DII) were also net sellers, pulling out Rs 874 crore.
IPO watch: The public issues of Shyam Metalics and Sona Comstar closed yesterday. Shyam Metalics was subscribed 121.43 times by investors. Sona Comstar’s IPO was subscribed 2.28 times with all but NIIs oversubscribing their portion. KIMS IPO was off to a good start on the first day, with retail investors already oversubscribing their portion of the issue and total subscription at 0.27 times. Meanwhile, Dodla Dairy’s IPO was oversubscribed on day 1 with retail investors bidding for 2.73 times their quota. Overall subscription stood at 1.40 times at the end of day one.