Benchmark indices BSE Sensex, NSE Nifty 50 are expected to open in the red as trends in SGX Nifty indicate a negative opening for Indian equities with a loss of 80 points. “On Wednesday, FOMC and Bank of Japan would be announcing their interest rate decision followed by Bank of England on Thursday. If the Fed raises the interest rate by 75 bps in line with market expectation, then we can expect the positive momentum to continue, and Nifty may inch towards 18000. However Powell’s commentary would also be significant as it would give indication of the longevity of the rate hike cycle,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.
5 things to know before share market opening bell
Global market watch: Wall Street ended Tuesday lower as investors braced for another large interest rate hike by US Fed. The Dow Jones Industrial Average fell 1.01%, the S&P 500 lost 1.13%, and the Nasdaq Composite dropped 0.95%. Shares in the Asia-Pacific opened lower Wednesday, following Wall Street’s negative lead. Japan’s Nikkei 225 dropped 1% in early trade, while the Topix index fell 0.94%. In Australia, the S&P/ASX 200 slipped 0.32%. South Korea’s Kospi declined 0.35%. MCSI’s broadest index of Asia-Pacific shares outside Japan shed 0.17%.
Technical view: A small positive candle was formed on the daily chart with gap up opening and with long upper shadow. Technically this signal presence of strong overhead resistance around 17900-18000 levels. The chart pattern could also indicate weak upside bounce in the last two sessions compared to recent weakness from the highs. The upside bounce of the last two sessions could be a relief rally after a sharp weakness from the highs. If Nifty fails to move above 17920 levels in the short term, then one may expect beginning another round of weakness from the highs towards 17450 levels, according to Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Levels to watch for: “The support for Nifty has shifted around 17600 levels while on the upside 17950 may act as an immediate hurdle. On the other hand, Bank nifty has support at 40700 levels while resistance at 41800 levels. Overall, the Nifty is looking volatile for an upcoming session. Pharma stocks rebound and look attractive for investment purposes,” said Palak Kothari, Senior Technical Analyst, Choice Broking.
Stocks under F&O ban on NSE: Delta Corp, Escorts, India Cements, PVR, and RBL Bank are the five stocks under the NSE F&O ban list for September 21. Securities thus banned under the F&O segment include companies where derivative contracts have crossed 95% of the market-wide position limit.
Oil prices fall: Oil prices extend losses on fears aggressive Fed rate hike will curb demand. Oil prices slid on Wednesday, extending the previous day’s losses, as investors braced for another aggressive interest rate hike from the US Federal Reserve that they fear could lead to recession and plunging fuel demand. Brent crude futures dropped 26 cents, or 0.3%, to $90.36 a barrel by 0040 GMT after falling $1.38 the previous day. US West Texas Intermediate crude was at $83.74 a barrel, down 20 cents, or 0.2%.