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Trends on SGX Nifty indicate a positive start for stock market indices

09:04 AM Dec 07, 2021 | FPJ Web Desk

Trends on SGX Nifty indicate a positive start for the broader index in India, with a gain of 83.50 points or 0.49 percent.

Indian markets could open higher in line with positive Asian markets today and higher US markets on Monday, said Deepak Jasani, Head-Retail, HDFC Securities.

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Gaurav Udani, Founder and CEO of ThincRedBlu Securities, said, “Nifty is expected to open positive at 17,000 levels. Nifty has resistance at 17,085 and 17,200 levels. Since the last few sessions Nifty has been making lower highs and lower lows indicating a weak trend. Traders are advised to keep strict stoploss in current volatile markets.”

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Mohit Nigam, Head - PMS, Hem Securities said, "All the major global market closed in green yesterday. Investor’s continued to adopt a cautious approach given the uncertainty around the Omicron virus and extended previous Friday fall as on next week also. Going forward, investors have to be little watchful as more Omicron cases had been detected in India and the recent news flow around the variant will contribute to equity market volatility in the coming weeks. "

Inflation is the second risk the markets will have to deal with. Any disruption in supply chains because of Omicron may further exacerbate inflationary pressures, he said.

Stock to watch out for

Tata Motors can be in focus today as the company increased the price of it’s commercial vehicle effective from beginning of next year.

On the technical front, the key resistance levels for Nifty50 are 17,100 followed by 17,450 and on the downside 16800 followed by 17620 can act as strong support. Key resistance and support levels for Bank Nifty are 36,500 and 35,350 respectively, Nigam said.

Nifty fell sharply on Dec 06 as mixed Asian markets highlighted valuation concerns in Indian equities. At close Nifty was down 284.5 points or 1.65% to 16912. Nifty closed at the lowest in 3 months.

Nifty continues its downtrend and the next level of support is 16722-16782 band. On upmoves 17026-17051 could act as a resistance. The downtrend may be close to its end going by the number of days it has lasted so far (33). However the recovery may be slow.

US stocks close higher

The Dow Jones Industrial Average scored its biggest daily point gain in more than a year on Monday, while the S&P 500 climbed to its highest close in a week, as investors shrugged off fears about COVID’s omicron variant and prepared for new inflation data on Friday.

Reports from South Africa show that while the virus is rapidly spreading, hospitalizations aren’t. Investors appeared to be reassured by Dr. Anthony Fauci, the top U.S. infectious disease official, who told CNN that "thus far it does not look like there's a great degree of severity to it." However, he did say that more study is needed.

The yield on the 10-year Treasury note rose 9.1 basis points on Monday to 1.433 percent, up from 1.342 percent. It’s the largest one-day gain for the yield in more than three weeks. In oil futures, West Texas Intermediate crude for January delivery climbed $3.23, or 4.9 percent, to settle at $69.49 a barrel. Oil rose as concerns about the impact of the Omicron variant on global fuel demand eased while Iran nuclear talks hit roadblocks, delaying the return of Iranian crude supplies.

Goldman Sachs on Saturday cut its outlook for U.S. economic growth to 3.8 percent for 2022, citing risks and uncertainty around the emergence of Omicron.

Economy showing signs of recovery

Indian economy is showing strong signs of recovery from the devastation caused by the pandemic, with an upswing being reported in 19 out of the 22 economic indicators as compared to the pre-Covid levels.

Asian stocks up

Most Asian stocks rose at the open Tuesday after USequities rebounded and China pledged measures to support slowing economic growth. Treasuries steadied after tumbling.

MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.6 percent after declining on Monday to the lowest level in one year, according to Reuters. The benchmark has lost 6 percent so far this year, with Hong Kong markets figuring among the big losers, while Indian and Taiwanese stocks outperformed.

On Tuesday, Australia's S&P/ASX200 rose 0.5 percent, while Japan's Nikkei advanced 1.1 percent as risk-on sentiment pushed US stocks higher. China's CSI300 index gained 0.7 percent and Hong Kong's Hang Seng Index advanced 1.3 percent as the central bank freed up $188 billion in liquidity through a policy easing.

Oil prices up

Oil prices ticked higher, consolidating a nearly 5% rebound the day before as concerns about the impact of the Omicron variant on global fuel demand eased. Brent crude futures rose 0.6 percent to $73.5 a barrel, after settling 4.6 percent higher on Monday.

Bitcoin prices decline

Bitcoin slid 0.63 percent to $49,124.70 after hitting a low of $41,967 over the weekend as profit-taking and macro-economic concerns prompted nearly $1 billion worth of selling across cryptocurrencies. The world's largest cryptocurrency was last around $50,800, having closed a choppy day on Monday 2.2 percent higher.

(With inputs from Reuters)

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