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In a flat-to-negative finish, the Dow Jones Industrial Average ended lower by 0.71%, the S&P 500 lost 0.30% and the Nasdaq Composite dropped 0.1% overnight.
Indian benchmark indices are likely to open on a lower note, hinted SGX Nifty. On the Singapore Exchange, Nifty futures were in the red, down 33 points, at the 17,366 level. Nifty had broken & closed below 200 DMA and the support level of the budget day low of 17,353. “Global investors’ interest in the equity market is weakening due to the slowdown in the economy, led by high inflation and contractionary monetary policy. Inflows are being diverted to safe assets, and corporate earnings growth is dropping, affecting the performance of the stock market and demanding downgrade in valuation. The double whammy for India is that it is expensive compared to other EMs, resulting in underperformance among the global market,” said Vinod Nair, Head of Research, Geojit Financial Services.
Key things to know before share market opens
Wall Street Overnight
Wall Street continued to extend its slide, as further evidence of sticky inflation added to fears of continued rate hikes with little to no respite. Reuters suggested that investors and traders are less concerned about global recession and more about the sustained high interest rates.
In a flat-to-negative finish, the Dow Jones Industrial Average ended lower by 0.71%, the S&P 500 lost 0.30% and the Nasdaq Composite dropped 0.1%.
Asian Markets
Stocks in Asia-Pacific were higher on Tuesday, following Wall Street’s cues. Japan’s Nikkei 225 traded down by 0.17%, and South Korea’s Kospi added 0.42% in its first hour of trade. China’s Shanghai Composite and Shenzhen Component advanced 0.13% and 0.17%, respectively. Hong Kong’s Hang Seng index traded decisively in the positive territory, gaining 0.98% in trade.
Crude Oil
Oil prices rose more than 1.5% on Tuesday, erasing the previous session’s losses, as hopes for a strong economic rebound in China offset worries about U.S. interest rate hikes dragging down consumption in the world’s biggest economy. U.S. crude rose 1.68% to $76.95 per barrel and Brent was at $83.87, up 1.72% on the day.
FII/DII Data
Foreign institutional investors (FII) net sold shares worth Rs 4,559 crore, while domestic institutional investors (DII) acquired equities worth Rs 4,610 crore on 24 February, according to the provisional data available on the NSE.
F&O Ban
The National Stock Exchange has no stocks on its F&O ban list for 28 February. According to the NSE, stocks are prohibited in the F&O sector when they have exceeded 95% of the market-wide position limit (MWPL). During the F&O ban period, no new positions are permitted for F&O contracts in that stock.
Technical View
“A reasonable negative candle was formed on the daily chart. This candle pattern has negated the positive candle like hammer of the previous session. New swing low was formed at 17255 levels. After the downside breakout of immediate support of ascending trend line at 17490 levels on 24th Feb, the market has been showing weakness in the next two sessions there by confirming a validity of downside breakout.
“The down trend continued in the Nifty and the immediate supports have started to break one after another. The next downside levels to be watched are around 18150-18050 in the short term. Immediate resistance is at 17450 levels,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Levels to Watch
“Volume profile indicates Index has a strong support around the 17,150-17,200 zone. Coming to the OI Data, on the call side, the highest OI observed at 17,400 followed by 17,500 strike prices while on the put side, the highest OI is at 17,000 strike price. On the other hand, Bank Nifty has support at 39,450-39,600 while resistance is placed at 40,800-41,000 range,” said Om Mehra Equity Research Analyst, Choice Broking.
India’s Q3FY23 GDP
“The Indian economy grew less-than-expected by 4.4% in the third quarter compared to a 6.3% growth registered in the second quarter. The high inflation has definitely taken a toll on the demand side of the equation. Though some moderation in growth can be attributed to the base effect, we believe that the series of hikes by the RBI last year is having visible effects on the economy,” said Manish Chowdhury, Head of Research, Stoxbox.