Indian benchmark indices Sensex and Nifty are likely to open with cautious gains on Tuesday after the long weekend, with GIFT Nifty pointing to a positive start. However, Brent crude prices above $106 a barrel, continuing Middle East tensions and caution ahead of the US Federal Reserve's policy decision temper the global backdrop. Indian markets were closed on Monday for a holiday and will be absorbing two days of global developments when trading resumes.
GIFT Nifty was trading at 23,521 around 8 am, up 77 points, or 0.33 percent, from Monday's close. It was about 66 points, or 0.28 percent, above its Friday close. Indian equities had recovered sharply from their intraday lows in the previous trading session on Friday, September 11, but still ended marginally lower. The Sensex fell 120.83 points, or 0.16 percent, to 74,781.76, while the Nifty declined 79.70 points, or 0.34 percent, to 23,398.10, amid selling in metal, realty and PSU bank stocks.Nifty Technical Outlook:
Ponmudi expects the Nifty to retain a weak undertone, with 23,500-23,600 acting as immediate resistance and 23,300-23,200 as the crucial support zone. A sustained move above 23,600 could open a recovery towards 23,800-24,000, while a break below 23,200 could expose the index to 23,000.Foreign institutional investors remained net sellers for a fourth consecutive session in the previous domestic trading session, offloading equities worth Rs 930 crore on September 11. Domestic institutional investors continued to provide a counterweight, purchasing equities worth Rs 1,968 crore
Asian markets cautious ahead of US Fed decision
Asian markets were struggling for direction ahead of central bank decisions in the US and Japan. The stocks were subdued on Tuesday as investors weighed geopolitical risks, high crude oil prices and concerns around the artificial-intelligence trade.MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.12 percent, with South Korea's Kospi down 0.25 percent. Japan's Nikkei reversed early losses to trade 0.19 percent higher, while Hong Kong's Hang Seng fell 0.4 percent and the Shanghai Composite declined 0.3 percent.Attention is firmly on the US Federal Reserve, whose two-day policy meeting begins later on Tuesday. Reuters reported that the markets are pricing in around a 90 percent probability of a rate increase, which would be the Fed's first hike since mid-2023.
Brent above $106 as Middle East supply risks persist
Crude oil remains a major concern for Indian markets, with prices rising again on Tuesday amid fresh threats to Middle Eastern energy infrastructure. Brent crude climbed 1.21 percent to $106.96 a barrel, while West Texas Intermediate rose 1.27 percent to $102.68. Yemen's Iran-aligned Houthis launched another attack on Saudi Arabia on Monday, while Riyadh blamed Iran-backed fighters in Iraq for an attack on the kingdom's east-west pipeline that it said could disrupt as much as 4 percent of global oil supply. Gulf Arab states also postponed planned talks with Iran.Ponmudi R, CEO of Enrich Money, said the macroeconomic pressure from higher oil prices amid an uncertain geopolitical backdrop is likely to keep investor sentiment guarded at higher levels.Wall Street falls; US 10-year yield briefly crosses 5%
US equities ended lower on Monday, and US Treasury yields remained elevated. Technology stocks were under pressure as investors also prepared for this week's Federal Reserve decision. The S&P 500 declined 0.48 percent to 7,619.94, while the Nasdaq fell 0.56 percent to 26,186.41 and the Dow Jones Industrial Average slipped 0.29 percent to 52,421.17.Nvidia and other chipmakers came under pressure after senior executives at US artificial-intelligence companies raised safety concerns and called for a slowdown in AI development.Written by Shaleen Agrawal
Source: Network18
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