Domestic stocks are likely to see a muted start to Tuesday’s trade amid back-to-back drop in US indices on mounting fears of recession and weak momentum in Asia amid concerns over surging Covid cases in China. Dollar index edged higher while oil prices also moved up, which may weigh on the domestic sentiment. All eyes would be on the kick start of Elin Electronics initial public offer. Here’s what you should know before the Opening Bell:
Nifty outlook
Nifty on Monday formed a Bullish candle on the daily scale, with a long lower shadow, indicating support-based buying at lower The index has to hold above 18,350 level for an upmove towards 18,500 and 18,650 level whereas support for the index is placed at 18,350 and 18,250, said Chandan Taparia of Motilal Oswal Securities.
SGX Nifty signals a muted start
Nifty futures on the Singapore Exchange quoted 33.50 points, or 0.18 per cent, lower at 18,453.50, hinting at a muted start for the domestic market on Tuesday.
Asian markets mostly lower
Asian share markets were trading mostly in negative territory on Tuesday, as investors anticipated a somewhat rocky road for China’s unwinding of Covid restrictions and the prospect that US interest rates will rise higher than expected in 2023, Reuters reported. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2 per cent after US stocks ended the previous session lower. Japan’s Nikkei rose 0.34 per cent. Hong Kong’s Hang Seng Index was down 1 per cent early in the session while China’s CSI300 Index was off 0.34 per cent.
Oil prices up, but gains capped
Oil prices rose in early trade on Tuesday, shored up by a US plan to restock its Strategic Petroleum Reserve, but gains were limited by uncertainty over the impact of rising Covid-19 cases in China, the world’s top oil importer, Reuters reported. Brent crude futures advanced 61 cents, or 0.8 per cent, to $80.40 a barrel, adding to a 76 cent gain in the previous session. US West Texas Intermediate (WTI) crude futures rose 65 cents, or 0.9 per cent, to $75.84 barrel, after climbing 90 cents in the previous session.
Dollar index edges higher
The dollar index, which measures the currency against the yen, euro and four other major peers, edged 0.13 per cent higher to 104.75, approaching Monday’s high of 104.93, which was its strongest level since December 13. The dollar gained 0.37 per cent to 137.415 yen. The euro edged 0.07 per cent lower to $1.0601, giving up a little of Monday’s 0.23 per cent gain. Sterling was flat at $1.21455, holding close to the previous session’s nearly two-week low of $1.2120.
US stocks fall for 4th straight day
Wall Street closed lower on Monday for a fourth straight session with Nasdaq leading declines as investors shied away from riskier bets, worried the Federal Reserve’s tightening campaign could push the US economy into a recession. The Dow Jones Industrial Average declined 162.92 points, or 0.49 per cent, to 32,757.54. S&P500 index lost 34.7 points, or 0.90 per cent, to 3,817.66. Nasdaq Composite slipped 159.38 points, or 1.49 per cent, to 10,546.03.
Elin Electronics IPO to open today
The Rs 475 crore initial public offer (IPO) by Elin Electronics will open for public subscription today. The issue comprises a fresh issue of Rs 175 crore and an offer for sale of Rs 300 crore to be sold in the 234-Rs 247 price band. Last heard, the IPO was commanding a grey market premium (GMP) of Rs 45 per share. Elin Electronics is in a promising and growing industry, which has huge scope of growth, said analysts who said the company’s increasing focus on higher margin ODM segment is positive. Overall, they are neutral to positive on the issue.
Stocks in F&O ban
Shares of IRCTC, Balrampur Chini, BHEL, GNFC, Delta Corp, Indiabulls Housing and Punjab National Bank are banned in the F&O segment today. 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.
DIIs buy shares worth Rs 687 crore
Provisional data available with NSE suggests FPIs were net sellers of domestic stocks to the tune of Rs 538.10 crore on Monday. Domestic institutional investors (DIIs) were buyers of equities to the tune of Rs 687.38 crore.
Rupee rises 13 paise against dollar
The rupee rose by 13 paise to settle at 82.62 against the US dollar on Monday as robust buying in the domestic equities and a weak American currency against key crosses overseas boosted investor sentiments. However, fresh foreign capital outflows and rising crude prices restricted the rupee’s rise, forex dealers said.
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