Indian benchmark indices are likely to open in green amid strong global cues. SGX hints at a positive start for domestic equities as Nifty futures are trading marginally higher at 17995 level on the Singapore Exchange. In the previous session, BSE Sensex plunged 632 pts to 60,115, while NSE Nifty 50 shed 187 pts to 17,914. “Markets are gradually drifting lower amid volatility and indications are pointing towards more pain ahead. Meanwhile, mixed global cues combined with earnings season would keep traders on the edge. We thus reiterate our view to limit positions and prefer a hedged approach, especially for the overnight trades,” said Ajit Mishra, VP – Technical Research, Religare Broking.
Key things to know before share market opens
Global market watch: Asia-Pacific shares traded mostly higher on Wednesday as investors looked ahead to the US consumer price index (CPI) inflation numbers. Japan’s Nikkei 225′s traded up 0.84% and the Topix inched up 0.7%. South Korea’s Kospi added 0.71%, and the Kosdaq climbed 1.04%. Hong Kong’s Hang Seng index rose 0.83% in its first hour of trade, while mainland China’s Shanghai Composite inched up fractionally and the Shenzhen Component was down 0.24%. Overnight, US stocks ended solidly higher, led by a 1% gain in the Nasdaq, on relief that Federal Reserve Chair Jerome Powell refrained in a speech from commenting on rate policy. The Dow Jones Industrial Average (.DJI) rose 0.56%, the S&P 500 (.SPX) gained 0.70%, and the Nasdaq Composite (.IXIC) added 1.01%.
Key levels to watch: “As Nifty remains below 18000, weakness may be seen towards 17800-17700 zones. As Bank Nifty suggested more weakness in line, heavyweight banks showed no resilience to free fall so closing below 41800 levels would stretch towards 41000. On the derivatives front, the highest call OI is at 18100 followed by 18200 strike prices while on the put side, highest OI is at 17700 strike price. We advise investors to remain cognizant of prevailing risks related to the macroeconomic environment. Many of the quality stocks have corrected meaningfully in the last couple of weeks, and could give healthy returns in the short term,” said Om Mehra, Equity Research Analyst, Choice Broking.
FII and DII data: Foreign institutional investors (FII) net-sold shares worth Rs 2,109.34 crore, while domestic institutional investors (DII) net-bought shares worth Rs 1,806.62 crore on 10 January, according to the provisional data available on the NSE.
Stocks under F&O ban on NSE: The National Stock Exchange has Indiabulls Housing Finance and GNFC stocks under its F&O ban list for 11 January. According to the NSE, the stocks mentioned above are prohibited in the F&O sector because 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 these stocks.
World Bank gives recession warning: The World Bank slashed its growth forecasts for most countries and regions and warned that new adverse shocks could tip the global economy into a recession. Global GDP will probably increase 1.7% this year, about half the pace forecast in June, the Washington-based lender said Tuesday. That would be the third-worst performance in the last three decades or so, after the contractions of 2009 and 2020.
US Fed Chair Powell avoids policy rate comment: Federal Reserve Chair Jerome Powell refrained in a speech from commenting on rate policy in his first public appearance of the year. Powell said at a forum sponsored by the Swedish central bank that the Fed’s independence is essential for it to battle inflation. Recent comments by other Fed officials have supported the view that the central bank needs to remain aggressive in raising interest rates to control inflation. Powell in his speech also emphasized the importance for the central bank’s independence from political influence, without giving direct clues on where the monetary policy is headed.