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NEW DELHI: The 50-share Nifty index is expected to open lower on Wednesday tracking muted Asian markets. Tracking the muted momentum, the index is expected to test its key psychological support level of 5800 in trade today.
At 07:30 a.m., Nifty India stock futures in Singapore were trading 49.50 points lower at 5812, indicating a lower opening on the domestic market.
The 50-share Nifty index closed in the red near its support of 5,850 on Tuesday, as investors resorted to profit booking after three-day up-move led by institutional buying activity. Weak cues from European markets also hurt sentiment.
Daily chart indicates that Nifty is facing a stiff resistance at 5920 levels due to the profit booking after the three days of stiff upward movement. On the flip side, the immediate support lies at 5750 mark.
"As long as Nifty holds this support level of 5750, investors should trade with positive bias and any downward correction can be used to build long positions in the Nifty," said Swati A. Hotkar, Technical Analyst at LKP Advisory.
"We maintain our bullish view with the stop loss of 5750 levels," she added.
The expected pause near 5900 is now in play and there is a likelihood of a decline till 5775 to 5750 range in the coming sessions as long as 5950 is not taken on the upside, say analysts.
"The decline may however prove to be a short-lived one and it may yet again attempt to scale higher," GEPL Capital said in a report.
The brokerage firm maintains their sell recommendation on Nifty with a stop loss of 5950 for a target of 5775 to 5750
Overnight, US stocks ended lower as traders were adjusting their positions before the all-important non-farm payrolls report on Friday and a holiday on Thursday.
"The major U.S. stock indexes traded higher until early afternoon, boosted by positive car sales and factory orders. The energy sector index rose after crude oil prices hit a nine-month high as turmoil in the Middle East unsettled investors," Reuters reported.
The Dow Jones industrial average fell 42.55 points, or 0.28 per cent, to end at 14,932.41. The Standard & Poor's 500 Index dipped just 0.88 of a point, or 0.05 per cent, to finish at 1,614.08. The Nasdaq Composite Index slipped 1.09 points, or 0.03 per cent, to close at 3,433.40.
Asian markets were trading muted tracking losses made in US markets overnight and concerns of continuation of further monetary easing by the US Federal Reserve.
"U.S. new motor vehicle sales in June were poised to record their strongest month in more than 5-1/2 years, while factories posted a second straight month of gains in new orders in May," said the Reuters report.
According to analysts, ideally these strong numbers should bolster risk appetite, but investors at this stage are a bit worried on Fed winding down of stimulus support as economic recovery continues.
U.S. crude held above $100 a barrel, its highest since May 2012 as turmoil in the Middle East unsettled investors.
Japan's Nikkei 225 index was trading 0.57 per cent lower at 14,014.17 and Hong Kong's Hang Seng index was trading 1.2 per cent lower at 20,393.12.
South Korea's Kospi index was trading 0.5 per cent lower at 1845.45. China's Shanghai index was trading 1.1 per cent lower at 1,984.63.
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