Markets may post losses in the opening trades following weak global cues as disagreement continued over US debt deal and investors squaring of positions ahead of the futures and options expiry today.
The Nifty futures on the Singapore Exchange declined 48 points, at 5,500.
On the technical charts Nifty faces resistance at 5,700 and has support at 5,500 levels. Alex Mathews, Head of Research from Geojit BNP Paribas Financial Services said, “The markets can edge lower in the coming days due to debt concerns in the US and high inflation levels in India. The interest rate sensitive sectors may remain under pressure for some more time.”
Analysts recommend investors to wait for one or two days before investing in equities. “It is good time to accumulate stocks once the Nifty falls below 5,500,” added Mathews.
Foreign Institutional Investors formed short positions in index futures and stock futures yesterday. They were net sellers of Rs 1284 crore in F&O, they sold index futures of Rs 665 crore, bought index options of Rs 56 crore and sold stock futures of Rs 700 crore. However, the net cash positions were subdued, they were net sellers of Rs 13 crore according to provisional data available from Bombay Stock Exchange.
Among the Indian ADRs listed on Nasdaq, HDFC Bank was the top loser, down 3%, followed by Tata Motors and Infosys.
Stocks such as ITC, Hindustan Unilever and ONGC will be closely watched in opening trades ahead of the fourth quarter results today.
In the US, there was no sign of agreement on raising the US debt ceiling, even though the August 2nd deadline drew closer, causing risk aversion for equities.
Japan's Nikkei Stock Average declined 1.1%, South Korea’s Kospi Composite lost 0.8%, Hong Kong’s Hang Seng Index was down 1% and China's Shanghai Composite index was down 0.8%.
