Markets may extend Monday's losses in opening trades after Standard & Poor's cut Italy's credit rating. The Nifty futures on the Singapore Exchange tumbled 16 points, at 5,027.
Italy's credit rating was cut from A to A+, with a negative outlook due to the government debt which was the highest among the sovereign nations. There are concerns that Euro-zone nations may not be able to reduce their debt burden.
Most of the Asian markets were trading lower on Tuesday morning. Japan's Nikkei Stock Average slipped over 1% after the three day weekend, Hong Kong's Hang Seng index declined 1% and the China's Shanghai Composite was off 0.2%. Shares from the commodity sector were losing ground in morning trades.
Back in India, Ashish Chaturmohta, Vice President - Derivatives and Technical Analyst from IIFL Wealth said, "Nifty future holds important support at 4960 levels, below which 4920 can be tested. On the upside, 5150 caps as an immediate resistanc , sustaining above this on closing basis can gain positive momentum towards 5240 crucial levels."
On Monday, Foreign Institutional Investors were net sellers of Rs 166 crore of cash, and the Domestic Institutional Investors were also net sellers of Rs 38 crore. On the options front, the FIIs were net sellers of Rs 44 crore. They were sellers of Rs 34 crore in index futures; however they bought options worth Rs 214 crore, while they were sellers of Rs 254 crore in stock futures.
There is an upward shift in Nifty options which may limit downside from the current levels. According Emkay Alternate Intelligence note, “Among Nifty September call options, maximum concentration witnessed an upward shift from 5200 strike to 5300 strike. Open interest increased by 0.57 million shares to 6.67 million shares.”
Among the Indian ADRs listed on the Nasdaq Stock Exchange, IT shares slipped the most. Infosys and TCS were down almost 3% each, and Wipro was off 1%. The IT stocks may be on the radar in opening trades in India due to growing debt concerns in Europe.
Among individual stocks Fortis Healthcare may be on the buzzer this morning on news of buying stake in Singapore’s Fortis International.