10 things to know before you make your opening trade on Wednesday
The Nifty faced resistance near the daily upper Bollinger Band for the third consecutive session. From thereon the index had a significant fallen and filled up the recent gap area of 17646-17610, Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said
The Indian markets ended Tuesday’s session on a negative note, as Sensex cracked over 400 points to lose 60,000 shine and Nifty end below the 17750-mark. The decline was mainly led by information and technology stocks along with Bharti Airtel.
The Nifty faced resistance near the daily upper Bollinger Band for the third consecutive session. From thereon the index had a significant fallen and filled up the recent gap area of 17646-17610, Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said.
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He added, “The index witnessed buying support as it approached the swing low of 17524 & recovered to some extent towards the end of the session. The daily upper Bollinger Band, which has become flat, is likely to maintain pressure on the higher side.”
The daily momentum indicator has formed a bearish hook, suggesting weakness in the short term. Thus the Nifty is expected to witness short-term consolidation in the range of 17400-17950, Ratnaparkhi explains.
Global markets witnessed weakness as investors continued to remain cautious over the inconclusive German election along with Chinese property group Evergrande’s ongoing debt crisis and eyed the potential impact of a widening power shortage in China, said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.
Khemka further added, “Energy prices rocket to new all-time highs while Brent is at 3-year high which is making investors nervous about its impact on the economy. All this along with testimony of US Fed Chairman on US economy in front of Congress pushed 10-year Treasury bond yields above 1.50% for the first time in two months.”
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Global shares fell for a third day in a row on Tuesday, with tech stocks plummeting, as anxiety over when central banks might raise interest rates led to rising bond yields on both sides of the Atlantic.
U.S. Treasuries extended their sell-off into a fourth day with the 10-year yield reaching a level last seen in mid-June, Reuters reported. All three major U.S. stock indexes slid more than 1.5%, with interest rate sensitive tech and tech-adjacent stocks weighing heaviest as investors lost their risk appetite, the report said.
The Nasdaq Composite index of tech stocks and the S&P 500 index saw their worst daily falls since March and May respectively and were on track for their biggest monthly declines since September 2020, it said.
Tech stocks usually fall when bond yields are rising because they have higher valuations and are most reliant on future growth, which can be curtailed by higher interest rates, the report further said.
The Dow Jones Industrial Average fell 569.84 points, or 1.63%, to 34,299.53, the S&P 500 lost 90.5 points, or 2.04%, to 4,352.61 and the Nasdaq Composite dropped 423.29 points, or 2.83%, to 14,546.68.
Investors were bracing for potential market turbulence on Wednesday as a bond coupon payment for China Evergrande Group comes due, giving the embattled property developer its next test in public markets.
Once the face of China`s frenzied building boom, Evergrande has now become the face of a crackdown on developers` debts that has spurred volatility in global markets and left large and small investors sweating their exposure, another Reuters report said.
The company is due on Wednesday to make a $47.5 million bond interest payment on its 9.5% March 2024 dollar bond, it furrther said.
SGX Nifty was trading with a negative bias at 7:20 am (IST). It was down 0.13 per cent or 23 points on Wednesday and was rading at 17,651.20.
Govt extends foreign trade policy till March 2022:
The government on Tuesday again extended the existing foreign trade policy (FTP) for another six months till March 31 next year, according to a notification.
Earlier, it had extended the FTP (2015-20) until September 30 this year due to the COVID-19 crisis. FTP provides guidelines for enhancing exports to push economic growth and create jobs. Under FTP, the government provides incentives under different schemes such as Duty Free Import Authorisation (DFIA) and Export Promotion Capital Goods (EPCG). FTP provides guidelines for enhancing exports to push economic growth and create jobs.
Sebi strengthens related party transactions rules:
Sebi on Tuesday approved a raft of measures, including tightening of norms for related party transactions, relaxing rules for issuance of shares with superior voting rights in technology companies and delisting norms.
The board also cleared frameworks for gold exchange and social stock exchange (SSE) for fundraising by social enterprises, Sebi said in a statement.
In a significant move, the Sebi board has approved amendments to norms to enable the introduction of Silver Exchange Traded Fund (ETFs) with certain safeguards in line with the existing regulatory mechanism for Gold ETFs.
Rupee slumps 23 paise:
The rupee tumbled 23 paise to close at 74.06 against the US dollar on Tuesday, as weaker Asian peers and massive sell-offs in domestic equities weighed on investor sentiment, PTI reported.
At the interbank foreign exchange market, the local currency opened at 73.79 and witnessed an intra-day high of 73.73 and a low of 74.12 against the US dollar in day trade. The local unit finally settled at 74.06 a dollar, down 23 paise over its previous close.
Aditya Birla AMC IPO open on Wednesday:
Ahead of its initial share sale that opens for public subscription on Wednesday, Aditya Birla Sun Life AMC on Tuesday said it has collected Rs 789 crore from anchor investors.
It was decided to allot 1,10,80,800 shares to anchor investors at Rs 712 apiece, valuing the aggregate transaction at Rs 788.95 crore, according to a circular uploaded on the BSE website.
ICICI Prudential Mutual Fund (MF), SBI MF, SBI Life Insurance Co Ltd, Axis MF, UTI MF BNP Paribas Arbitrage, Max Life Insurance and HSBC Global Investment Funds are among the anchor investors.
S&P Dow Jones brings cryptocurrencies to Wall St:
The S&P Dow Jones Indices launched new cryptocurrency indexes, it said on Tuesday, further mainstreaming digital currencies including bitcoin and ethereum by bringing them to the trading floors of Wall Street.
The new indexes, S&P Bitcoin Index, S&P Ethereum Index and S&P Crypto Mega Cap Index, will measure the performance of digital assets tied to them.
The list will expand to include additional coins later this year, the division of financial data provider S&P Global said.
FII & DII Data:
Foreign portfolio investors (FPIs) remained net sellers for Rs 1957.7 crore in the Indian markets while Domestic Institutional Investors (DIIs) were net buyers to the tune of Rs 161.45 crore, provisional data showed on the NSE.
Stocks under F&O ban on NSE
Four stocks – Idea, SAIL, Sun TV - are under the F&O ban. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.
(With inputs from PTI, Reuters and other agencies)
(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)
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