The sell-off in the domestic share market is likely to continue as SGX Nifty hinted at a gap-down open for NSE Nifty 50 and BSE Sensex with a loss of 101 pts or 0.5%. “We expect market volatility to continue until RBI MPC outcome and monthly derivatives expiry. We expect stock related to domestic consumption to perform well with strong festive season. Also sectors like Paint, FMCG would see momentum on the back of sharp fall in crude oil prices,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.
Things to know before share market opening bell
Global market watch: Shares in the Asia-Pacific were trading mixed at the open on Wednesday after the S&P 500 set a new 2022 low overnight on Wall Street. Japan’s Nikkei 225 fell 0.68%, while the Topix index slipped 0.67%. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.18%. South Korea’s Kospi shed 0.43%, and the Kosdaq gained 27%. In the US, the Dow Jones Industrial Average gave up earlier gains of around 400 points to fall 0.43% at the end of the session. The Nasdaq Composite was up 0.25%.
Nifty technical view: “A reasonable negative candle was formed on the daily chart, that has placed beside the similar negative candle of previous session. Technically, this pattern signal broader range bound action in the market with weak bias. It also indicates a lack of strength in the intraday upside bounce. This is not a good sign and one may expect further weakness in the short term. The area of 16800 has acted as an important value area, and has resulted in significant movement from its support/resistance/breakouts in the past. Hence, having declined swiftly from the highs of 18K mark this time, there is a possibility of a sustainable upside bounce from near this support,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Levels to watch for: As Nifty remains below 17150 zones, weakness may be seen towards 16850-16800 zones whereas hurdles are placed at 17250. As Banknifty suggested more weakness in line, heavy weights Bank showed no resilience to free fall. So, closing below 38000 levels would stretch towards 37200. Increasing exposure in quality stocks would be advisable for coming weeks, according to Om Mehra, Technical Associate, Choice Broking.
Stocks under F&O ban on NSE: Vodafone Idea, and Zee Entertainment Enterprises are the two stocks under the NSE F&O ban list for 28 September. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95 per cent of the market-wide position limit.
Global slowdown threat looms: The head of the World Trade Organization told Reuters on Tuesday that she expects that global trade forecasts will be revised lower from the current 3 per cent for 2022, citing the ongoing Russia-Ukraine war and related food and energy crises. “We are in the middle of revising our forecasts now but it’s not looking very promising. All the indicators are pointing to downside numbers,” Director-General Ngozi Okonjo-Iweala said adding “Grosso modo the outlook is looking gloomy. The WTO already revised down its forecast for global trade growth this year to 3 per cent from 4.7 per cent in April.