Domestic stock indices look set to open on a lower note on Wednesday, tracking an overnight fall in US stocks, thanks to US data showing strong business activity that raised fears of long-than-expected Fed rate hikes ahead. Asian markets were trading lower, as investors expected the minutes of recent Fed policy outcome, due later in the day, to support the view. Here’s what you should know before the Opening Bell:
Nifty outlook
Nifty bias stays negative as the index has fallen back into the descending channel on the daily chart, said Rupak De of LKP Securities. The momentum oscillator RSI has entered the bearish crossover, he said adding that the immediate support is visible at 17,750, below which the selling pressure may increase.
SGX Nifty signals a negative start
Nifty futures on the Singapore Exchange traded 79.50 points, or 0.44 per cent, lower at 17,866.50, hinting at a negative start for the domestic market on Wednesday.
Asian shares fall in early trade
Asian shares opened mostly lower on Wednesday, as investors turned jittery ahead of the release of minutes of recent Fed policy review that may hint at longer-than-expected Fed rate hikes. MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.92 per cent. Japan's Nikkei dropped 1.51 per cent; Australia's ASX 200 declined 0.24 per cent; New Zealand's DJ shed 0.68 per cent; Hong Kong's Hang Seng retreated 0.47 per cent; and Korea’s Kospi tanked 1.34 per cent. China's Shanghai slipped 0.40 per cent.
Dollar firm on strong economic data
The dollar stayed firm on Wednesday morning, after a surprise rebound in business activity in the United States raised the likelihood that the Fed would have further room to raise interest rates. The dollar index, which tracts the moment of dollar against a basket of six major world currencies, stood at 104 level. Data released on Tuesday showed that US business activity unexpectedly rebounded in February to reach its highest level in eight months.
US indices tank 2% overnight
US stocks recorded their worst performance of the year on Tuesday, with the key indices ending down as investors interpreted a rebound in US business activity in February to mean interest rates will need to stay higher for longer to control inflation. The Dow Jones Industrial Average fell 697.1 points, or 2.06 per cent, to 33,129.59, the S&P500 index lost 81.75 points, or 2 per cent, to 3,997.34 and the Nasdaq Composite index dropped 294.97 points, or 2.5 per cent, to 11,492.30.
Stocks in F&O ban
Vodafone Idea would be the only stock under F&O ban today. Derivative contracts in a security are banned when they cross 95 per cent of the market-wide position limit (MWPL). No new positions can be created in the derivative contracts of the said security. This prohibition is lifted when the open interest in the stock drops below 80 per cent of the MWPL across exchanges.
FPIs buy shares worth Rs 526 crore
Provisional data available with NSE suggests FPIs were net buyers of domestic stocks to the tune of Rs 525.80 crore on Tuesday. Domestic institutional investors (DIIs) turned sellers of equities to the tune of Rs 235.23 crore.
Rupee falls 6 paise against dollar
The rupee depreciated 6 paise to close at 82.79 against the US dollar on Tuesday as the strength of the American currency in the overseas market and a muted trend in domestic equities weighed on investor sentiments. Traders said the inflow of foreign funds in the domestic equities market, however, supported the Indian currency.
Note: With inputs from PTI, Reuters and other agencies
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