Nifty may open lower and break 5400 level following slump in global markets on concerns of slowing economic growth in US and sovereign debt crisis Europe. The Nifty futures on the Singapore Exchange declined 70 points, to 5,397.
While US averted debt default after Senate approved 74 to 26 vote of the $2.1 trillion plan for reducing defici and President Barack Obama signed the bill which raised the US government's debt ceiling, it failed to lift investor sentiment. Fears of credit downgrade by rating agencies and weak consumer spending data from the US further dented investor sentiment. Dow Jones Industrial Average declined 266 points, Nasdaq slipped 75 points and S&P 500 was off 33 points.
In Asia, Japan’s Nikkei Stock Average declined 2.2%, Hong Kong’s Hang Seng Index dipped 1.9%, and China's Shanghai Composite index was down 0.2%.
Back India analysts recommend investors to remain cautious if Nifty breaks 5,400. Amit Chedda- Head of Equity at Inventure Growth and Securities said, “Nifty is still in a consolidating range but traders need to be cautious if Nifty starts another leg of downtrend. Immediate resistance on the upside comes at 5550-5610 levels. And supports stand at 5350-5200.”
In the futures and options segment, Foreign Institutional Investors were net sellers of Rs 651 crore. FIIs sold Rs 631 crore in index futures, were net buyers of Rs 380 crore in index options, and sold Rs 408 crore of stock futures.
Among the ADRs listed on Nasdaq, TCS was the top loser, down 4.5%, followed by Infosys, down 3% and Wipro, down 2% each.
