Trends on SGX Nifty indicate gap-up opening for stock market indices

Trends on SGX Nifty indicate a gap-up opening for the stock market indices. Indian markets could open flat in line with range-bound muted Asian markets today and despite sharply lower US markets on Wednesday, said Deepak Jasani, Head-Retail Research, HDFC Securities.

Equity markets may see a strong opening tracking overnight buoyancy in US markets and positive trend in SGX Nifty on indications that foreign ministers from Ukraine and Russia will meet in Turkey today to find a solution to end the war. Tumbling oil prices are likely to lit a fire, while gold prices gave away recent gains to slip below $2000 levels, said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.

Nifty’s biggest supports for the day are placed at 15,921 mark. Buying on dips should be the preferred strategy as long as Nifty stays above 15,921 mark with targets at 16,695 mark and then aggressive targets at 16,953 mark. From a chartist standpoint, the technical landscape will improve considerably only if Nifty closes above 16,953 mark, added Tapse.

Equity benchmarks are projected to follow suit and open higher, owing to generally favourable global markets and SGX Nifty inclinations. The escalation of the Russia-Ukraine conflict, as well as the harsh sanctions imposed by Western countries on Russia, may cause trepidation, said Mohit Nigam, Head - PMS, Hem Securities. The market is showing signs of vigour, with buyers snapping up stocks at bargain prices.

Nifty built further on its Wednesday gains in afternoon trade on Thursday, tracking European markets. The Nifty bounced from the day's low of 15,990 to close near 16,350 mark. Rally in autos and banks stocks boosted the indices higher.

Nifty has reversed its recent downtrend ahead of the much awaited result of assembly polls in five states on March 10. Nifty has also filled the down gap made on 07 March 2022. Upside acceleration is likely to find resistance near 16,606 and later at 16,768. Wednesday’s low on Nifty index 15,990 will act as a strong support going forward.

Asia stocks rebound

Asia stocks joined forces in a global equities rebound Thursday as dip-buyers leaned into speculation that weeks of market gyrations may have priced in the economic impact of the conflict in Ukraine.

Assembly elections results, US Fed crucial events to impact markets

If you see a resolution of the war in Ukraine that could help shift sentiment, said Jasani. Time will tell whether the moves signal a sea change or are merely a temporary unwind after sharp, volatile moves across financial and commodity markets. Outcome of Assembly elections and the US Fed meet on March 16 are the next two important events that could impact the trajectory of the indices.

US stocks close sharply higher

US stock indexes finished sharply higher Wednesday, as oil prices pulled back from the highest level in more than seven years and investors looked forward to a meeting between top Russian and Ukrainian diplomats to potentially calm the deadly conflict, even as fierce fighting continued. Prospects of quelling the Russia-Ukraine war sparked major reversals across markets, with commodities retreating alongside traditional havens.

Ukraine President Volodymyr Zelensky said he is no longer pressing for NATO membership, one of Russia’s stated reasons for its invasion. Reports also have indicated that Zelensky is ready for a diplomatic solution to the hostilities sparked by Moscow’s unprovoked invasion of Kyiv.

Oil prices fall

Oil prices fell sharply Wednesday, with global prices settling down by more than 13 percent after climbing to a nearly 14-year high in the previous session when President Joe Biden banned US imports of Russian energy, upping pressure on Moscow over its decision to invade Ukraine. The United Arab Emirates said it supports hiking oil output to ease mayhem in energy markets.

On Wednesday, crude oil showed highest single day fall in last two years after OPEC+ member the United Arab Emirate said it supporting pumping more oils into the markets which in supply crunch due to sanctions on Russian oil by the United States. If OPEC+ nations agreed to increase production could restrict gains of crude oil in upcoming session.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd, said, "We expect WTI crude oil prices to remain volatile and expected to be traded in the range of $94-117 a barrel. Crude oil is having support at $100–95.60 and resistance is at $111.00–114.00. In INR terms, crude oil has support at Rs7,964-7,614; while resistance is at Rs8,872–9112."

US lawmakers unveiled a new bill that would fund the federal government for the remainder of the fiscal year, as well as provide further aid for Ukraine.

US CPI to jump by 7.8%: Economists

Consensus economists polled by Bloomberg are looking for the US CPI to jump by 7.8 percent in February compared to last year (data due on Thursday 830 am ET), which would mark the fastest annual jump since 1982.

Bitcoin advances after Joe Biden signs executive order

Bitcoin advanced about 8.8% to top $41,900 after President Joe Biden signed an executive order to explore regulation and use cases for crypto, which was viewed as constructive for the sector. The yield on the 10-year Treasury note jumped 7.6 basis points to 1.946 percent.

Bullion outlook

Gold and silver plunged on Wednesday after Russia and Ukraine said for de-escalation. Global equity markets showed solid strength and profit taking was seen in safe-haven assets. The dollar index also plunged more than 1 percent.However, global inflation concerns, geo-political tensions and lower growth prospects could support precious metals at lower levels.

Rahul Kalantri, VP Commodities, Mehta Equities Ltd., said, "We expect gold could hold its key support level of $1880 per troy ounce and silver could also hold $24.80 per troy ounce in today’s session. Gold has support at $1962-1942, while resistance at $2000-2021 per troy ounce. Silver has support at $25.48-24.92, while resistance is at $26.10-26.56 per troy ounce. In INR terms gold has support at Rs 51,780–50,910, while resistance is at Rs 53,415–54,084. Silver has support at Rs 8,380- 67,050 while resistance is at Rs 72,174–73,890."

CAD to widen to $23.6 bn: India Ratings

The country's current account deficit (CAD) is likely to widen to a 13-quarter high of $23.6 billion or 2.8 percent of GDP in October-December 2021-22 due to higher commodity prices following the Russia-Ukraine conflict, India Ratings and Research (Ind-Ra) said in a report.

The report said although the Omicron-led COVID-19 wave has subsided, the geopolitical risks to the global recovery have increased due to the Russia-Ukraine conflict.

“We expect the CAD to come in at the second-highest level of $23.6 billion (2.8 percent of GDP; 13-quarter high) in Q3 FY22 as against a deficit of $9.6 billion (1.3 percent of GDP) in Q2 FY22,'' the agency said.

In Q3 FY21, the deficit was $2.2 billion (0.3 percent of GDP).

Russian rouble drops to record lows

Russia's rouble tumbled to record lows in onshore trading on Wednesday despite measures by Moscow to shore up its battered economy and safeguard hard currency availability amid fresh economic sanctions triggered by its invasion of Ukraine, Reuters said.

Catching up after two days of market closure, the rouble jumped to 120.83 to the dollar on the Moscow Exchange before clawing back some losses to close at 120, or 12.5 percent softer than its Friday close. It closed 6.3 percent weaker against the euro at 127 after hitting a record 131 per euro in early trade.

(With inputs from Reuters)

Published on: Thursday, March 10, 2022, 08:34 AM IST