Nifty broke 5400 psychological support yesterday and the weakness is expected to continue today on back of lacklustre cues from Asia and as investors shuffle their positions on account of derivatives expiry this week.
The Nifty futures on the Singapore Exchange were down 5 points, at 5,357.
Markets witnessed heavy selling across the board yesterday as investors shunned away risky assets such as Euro zone crisis worsened following cut in Greek’s debt rating by Fitch and after Standard & Poor’s cut its rating on Italy to negative.
The Dollar Index strengthened against basket of currencies from 73 to 76 level and the euro which has the highest weightage in the index fell 1% to 1.40 against the dollar as traders flocked into the greenback.
Derivative Analysts expect weakness to persist and selling pressure could take the Nifty down to 5200, a decisive uptrend could only be seen Nifty closes above 5,500. India (VIX), a measure of near term risks which option traders perceive spiked up 8% to 21 levels which could be an early sign of selling pressure and heightened volatility ahead of the derivatives expiry this week.
Foreign Institutional Investors were net sellers of Rs 293.56 crore in cash yesterday while the Domestic Institutional Investors were net buyers of Rs 194.2 crore in equities.
European debt concerns and weakness across Wall Street kept investors cautious in Asia this morning. The Nikkei Stock Average slipped 0.1% led by losses in auto shares on worries off growth slowdown in China. Hong Kong's Hang Seng was also down marginally by 0.1% due in Chinese metals and property developers. China's Shanghai Composite index was down 0.7%.