Trends on SGX Nifty indicate a gap-up opening for Indian indices

2 weeks ago 34

Indian markets could open higher in line with mostly higher Asian markets today and sharply positive US markets on Wednesday. /Representative image /AFP PHOTO / WANG ZHAO |

The trends on SGX Nifty indicate a gap-up opening for Indian indices. Deepak Jasani, Head-Retail Research, HDFC Securities said, the Indian markets could open higher in line with mostly higher Asian markets today and sharply positive US markets on Wednesday.

Prashanth Tapse, Vice President (Research), Mehta Equities Ltd, said, Bulls are likely to regroup as early buoyancy in SGX Nifty is indicating a gap-up start for Indian stock markets thanks to dovish comments by Fed Chairman Jerome Powell after the rate hike. The markets are likely to take in its stride even the surprise repo-rate hike of 40 basis points by the RBI on May 4, and continue to march forward. Also, commanding attention will be the LIC IPO, which was subscribed 59 percent, on the first day of bidding. Technically speaking, Nifty’s interweek support is seen only at the 16,597 mark. To affirm momentum on the buy side, the index needs to stay above its 200-DMA at 17,238 mark.

On May 4, the Sensex was down 1,306.96 points or 2.29 percent at 55,669.03. Nifty was down 391.50 points or 2.29 percent at 16,677.60.

Asian stocks up

Stocks climbed in Asia, amid a bout of investor relief after the Federal Reserve raised interest rates as expected to tackle inflation while countering fears of super-sized hikes.

Nifty fell sharply on May 4, following an unscheduled sudden announcement by the RBI Governor raising repo rate and CRR. At close, Nifty was down 2.29 percent or 391.5 points at 16,677.6. In the process, Nifty was the worst performing index in the Asian region.

Nifty fell below the crucial support level of 16,824 and now seems headed for 16,013 over the next few sessions/weeks, albeit after some intermittent bounces one of which could happen today. On upsides, 16,824-16,889 band could now act as a resistance.

US stocks close higher after Fed hikes rates

US stocks ended sharply higher, after the Federal Reserve delivered the first 50-basis-point interest rate hike since 2000, but said larger 75-basis-point increases weren’t in play. Powell said half-point rises remain on the table for the next couple of meetings.

The Fed also outlined plans to reduce its near $9 trillion balance sheet. The 50-basis point move was the biggest from the US central bank since 2000 when President Bill Clinton occup...

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