firm start likely as lagging sectors recover, analysts say
The NSE Nifty 50 (India 50) is expected to open on Wednesday even though the short-term trend continues to be positive, analysts told Capital.com.
That said, the rupiah’s fall against the US dollar and global market wariness are likely to cast their shadow over the index in the coming week, they added.
“The recent rebound in laggards like information technology and metals has further eased the pressure. We maintain our positive but cautious stance and prefer sectors like autos, most fast moving consumer goods and banking for long-term opportunities,” said Ajit Mishra, Vice President (Research) at Religare Broking.
Grasim Industries share price and Hindustan Unilever share price could be the focus of concern on corporate actions on Wednesday.
The Rupee (INR) fell for the eighth straight session on Tuesday and broke above 80 against the US Dollar for the first time ever.
The currency, which finished at 79.97 on Monday, fell to 80.06 a dollar on Tuesday. The currency is down 7% this year as India’s current account deficit – the broadest measure of external finance – is likely to widen to 2.9% of gross domestic product in the coming fiscal year. ending March 31, according to a media report.
“The rupiah depreciated to record lows amid tighter monetary conditions, risk aversion sentiment and continued exits from domestic markets,” said Sugandha Sachdeva, Vice President (Commodity and Currency Research) at Religare Broking.
US Dollar Index (DXY)
India’s ‘bloated’ trade deficit
“Strong demand for dollars from oil importers amid high crude oil prices and concerns over a ballooning trade deficit were also key drivers behind the sharp decline in the Indian currency, where it broke above the bar. 80s,” he added.
“A long bullish candle formed on the daily chart on Tuesday, placed next to the similar long bullish candle from Monday.
Technically, this pattern signals a range-bound action or a consolidation move at the hurdle.
Short-term trend “intact”
Crucial overhead resistance like the 16,250-16,300 levels has been broken through gradually. Technically such a choppy move and range bound action on an upside break of significant resistance is not a good sign for the bulls to hold the highs,” said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
“Nifty’s short-term uptrend status remains intact.
But, the lack of strength in the bullish momentum could cause the bears to act from the higher levels,” Shetti added.
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Grasim Industries, the flagship company of Aditya Birla Group, said it is setting up a business-to-business e-commerce platform for building materials with an investment of INR 20 billion ($253 million).
The investments would be made over the next five years, the company said in a regulatory update. The platform, which will mainly focus on micro, small and medium enterprises in the building materials segment, will be led by a newly recruited management team.
Hindustan Unilever, the Indian arm of Unilever Plc and India’s largest fast-moving consumer goods company, posted a 13.85% annual rise in consolidated net profit to INR 23.91 billion for the quarter ended June .
The company’s standalone net profit increased by 11% to INR 22.89 billion, according to a regulatory update. The results were announced after market hours. On Tuesday, the company’s shares closed up 0.57% at INR 2,568.
Nifty 50 on Tuesday
On Tuesday, Nifty closed 0.38% higher at 16,340.55, up for the third day in a row, with sectors such as real estate, banks and autos the main gainers.
“Asian stocks were mixed on Tuesday as investors weighed oil prices, inflation concerns and corporate earnings. European stocks fell, hit by worries about a hawkish European Central Bank and slowing economic growth. Economic Growth.
The euro hit its highest level in about two weeks on reports that the European Central Bank may consider raising interest rates on Thursday by double the quarter point previously reported to counter a worsening climate. inflation,” said Deepak Jasani, head of retail research at HDFC Securities. .