Sensex, Nifty stare at negative start amid weak global cues; 5 things to know before opening bell

SGX Nifty was down deep in red, falling 250 points, hinting at another round of sell-off on Dalal Street. Global cues were also suggesting a weak start.

On Thursday, Foreign Institutional Investors (FII) sold stock worth Rs 2,074 crore (Image: REUTERS)

Domestic equity markets rebounded at the start of the weekly futures & options expiry session yesterday but failed to hold gains forcing headline indices to close flat. S&P BSE Sensex closed at 55,702, up 33.2 points or 0.06% while the NSE Nifty 50 gained 5 points or 0.03% to end at 16,682. Bank Nifty closed with losses. SGX Nifty was down deep in red, falling 250 points, hinting at another round of sell-off on Dalal Street. Global cues were also suggesting a weak start to the day with Wall Street equity indices having closed under the firm grip of bears.

Global watch: On Wall Street bears ran riot on Thursday. NASDAQ tanked 4.99% while the S&P 500 was down 3.57% and the Dow Jones fell 3.12%. Among Asian stock markets, Shanghai Composite, Hang Seng, Nikkei 225, KOSPI, and KOSAQ were all deep in red. Topix was up with gains.

What do the charts say: On the charts, Nifty 50 formed a long negative candle on Thursday’s chart after a huge long negative candle on Wednesday according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities. He added that technically, this indicates a lack of strength to sustain the highs. “But, it also signals a halt in a sharp follow-through weakness for the day after a sharp downside breakout of the 16800 levels in the previous session.”

Levels to watch out for: The short-term trend for the 50-stock Nifty continues to be negative, said Nagaraj Shetti. “A slide below 16600 levels is expected to open the next lows of 16200 levels in the near term. Any attempt of upside rally could find strong resistance around 16800-17000 levels as per the concept of change in polarity,” he added. Meanwhile, Sumeet Bagadia, Executive Director, Choice Broking said that he expects no major pullback till 16950 levels are taken off. 

FII and DII trades: On Thursday, Foreign Institutional Investors (FII) sold stock worth Rs 2,074 crore while Domestic Institutional Investors bought shares worth Rs 2,229 crore.

IPO Watch: LIC IPO sailed through on the second day of sale with Employees of LIC and Policyholders oversubscribing their portion of the issue. Retail investors have so far bid for 0.93 times the quota reserved for them. QIB and NII portion has been bid for 0.40 times and 0.47 times, respectively. 

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