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Markets are likely to open weak on Tuesday tracking other Asian peers. Japan's Nikkei share average slid to a two-and-a-half week low on Tuesday, pressured by worries about Greece's precarious financial position, while the prospect of a September lift-off for US interest rates also sapped confidence.
At 820am (IST), the SGX Nifty was trading 0.2% lower at 8,031 levels.
“We have been upholding our downside target for Nifty at 8,000 for nearly a month and now it’s on verge of testing the same. But, the way markets have slid in last one week, possibility of deeper correction can’t be ruled out. Hence, any pause or rebound can be considered for fresh short with emphasis mainly on PSU banks, and metal counters,” said Jayant Manglik, president – retail distribution, Religare Securities.
Nikkei 225 dropped 0.7% to 20,304.99 in mid-morning trade on Tuesday after falling to a low of 20,277.43, the weakest level since May 22. Market sentiment was dented by speculation of a US rate increase as early as September and persistent caution over Greece where debt talks showed no signs of producing a breakthrough.
On Monday, Nifty touched an intraday high and low of 8,131 and 8,030 respectively and finally closed 8,044 down around 70 points. Market breadth was negative as 790 stocks advanced against 1,843 stocks that saw a decline. The Nifty volatility index, India VIX stood at 18.8850, up around 4.40%.
Adds Sachin Shah, fund manager & head, Emkay PMS: “Indian equity markets are under pressure, mainly due to selling by FIIs. One of the major disappointment for the markets has been RBI’s scaling up the inflation projection to 6.0% by Jan'16 and revised the real GVA growth projection downwards to 7.6% for FY16E from 7.8% estimated earlier. This probably has diminished the hopes of an immediate further softening in the interest rate cycle, at least for the near term.”
With Reuters inputs
