Domestic stock indices may open lower on Wednesday, despite gains seen in other Asian markets. US stocks settled lower overnight. Crude oil prices were held steady whereas the US dollar too stood its ground. All eyes were on the minutes of the US Fed’s December policy meeting. Here’s what you should know before the Opening Bell:
Nifty outlook
The positions of the important moving averages and the momentum indicator RSI are suggesting positive trades in the near term. But the current chart setup doesn’t indicate any directional move.
“Over the short term, the index is likely to move within the range of 17,950-18,400. A breakout on either side will confirm a directional move,” he said.
SGX Nifty signals a weak start
Nifty futures on the Singapore Exchange quoted 54 points, or 0.29 per cent, lower at 18,252, hinting at a weak start for the domestic market on Wednesday.
Asian shares mostly up
Asian shares traded mostly higher on Wednesday morning ahead of the US Federal Reserve’s meeting minutes for December meeting. Japan’s Nikkei dropped 1.43 per cent, whereas Hong Kong’s Hang Seng, Australia’s ASX 200 and New Zealand’s DJ was up by 1.5 per cent each. Seoul’s Kospi rallied over a per cent. China’s Shanghai was marginally up.
Oil price hold steady
Oil prices held their ground on Wednesday after tumbling in the previous session as markets braced for minutes from the US Federal Reserve’s December policy meeting. Brent futures for March delivery rose 6 cents to $82.16 a barrel, a 0.1 per cent gain, by 1:23 GMT. US crude fell 2 cents, or 0.03 per cent, to $76.91 per barrel.
Dollar makes a strong start to 2023
The euro nursed losses on Wednesday and has helped the dollar to make a strong start to 2023, after a surprise slowdown in German inflation rallied bunds and sent the common currency sliding. The US dollar index rose 1 per cent on to 104.73.
The euro fell 1 per cent overnight, its sharpest drop in more than two months, and it hovered near three-week lows at $1.0550 early in the Asia session. The yen was last steady at 131.20 per dollar.
Wall Street settled lower
Wall Street’s main indices fell on the first trading day of the year following declines in technology and energy stocks, with investors awaiting the Federal Reserve’s meeting minutes for further clarity on the path of future interest rate hikes.
Dow Jones Industrial Average index shed 10.88 points, or 0.03 per cent, to 33,136.37; S&P500 index lost 15.36 points, or 0.40 per cent, at 3,824.14; and the Nasdaq Composite index dropped 79.50 points, or 0.76 per cent, to 10,386.98.
Stocks in F&O ban
National Stock Exchange (NSE) has not put any stocks under F&O ban for Wednesday, January 4. Derivative contracts in a security are banned when it crosses 95 per cent of the market-wide position limit (MWPL).
No new positions can be created in the derivative contracts of said security. This prohibition is lifted when the open interest in the stock drops below 80 per cent of the MWPL across exchanges.
FIIs sell shares worth Rs 628 crore
Provisional data available with NSE suggests FPIs were net sellers of domestic stocks to the tune of Rs 628.07 crore on Monday. Domestic institutional investors (DIIs) were buyers of equities to the tune of Rs 350.57 crore.
Rupee at record low
The rupee pared initial gains and slumped 22 paise to close at its all-time low of 83 against the US dollar on Tuesday, pressured by a strong greenback overseas and sustained foreign fund outflows, PTI reported.
“At the interbank foreign exchange market, the rupee opened on a positive note at 82.69 against the greenback, but pared the gains and fell to an intra-day low of 83,” said the news agency.
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Also read: Sensex, Nifty trade setup: 10 things you should know ahead of Wednesday’s session