Sensex, Nifty Likely To Open In Red; Jio Financial Listing In Focus

Indian markets are likely to open in red on Monday due to lack of positive signs from the global market. Gift Nifty opened the week with marginal decline of 0.05% or 9 points on August 21.

Jio Financial Services listing, falling rupee against US Dollar, China real estate giant Evergrande filing for bankruptcy, and weak Asia-Pacific markets are likely to be crucial triggers for the market.

Earlier last week on August 18, Sensex and Nifty 50 declined with Realty, IT, and healthcare indices posted the maximum drag amid bearish global trend. Meanwhile, PSU bank, FMCG, and Media indices witnessed marginal surge on Friday. The 30-share BSE Sensex fell 202.36 points or 0.31% to end at 64,948.66. Nifty 50 declined 55.1 points or 0.28% to settle at 19,310 on Friday.

Gift Nifty, previously known as SGX Nifty, traded at 19,320.5 down 9 points or 0.05% on Monday, August 21, 2023. The index on Monday opened at 19,329.5. It touched day's low of 19,301.0 and day's high of 19,348.

SGX Nifty is a derivative contract of the Nifty index. It which was traded on the Singapore Stock Exchange. Earlier this year on July 3, 2023, SGX Nifty was rebranded as GIFT Nifty and moved to the NSE International Exchange (NSE IX) in Gandhinagar, India.

Higher-than-anticipated surge in CPI inflation, unsatisfactory industrial production for the June month, concerns of another possible rate hike by Fed amid the robust retail sales data, declining rupee against strengthening US dollar, sluggish China's economy weighed on market sentiments, as per experts.

Asia-Pacific markets witnessed a dip on August 18 as investors evaluated Japan's July inflation data as China's real estate sector. China-based real estate giant Evergrande filed for bankruptcy protection in a U.S bankruptcy court and sought protection under Chapter 15 of U.S. bankruptcy code, stated report. Meanwhile, Japan's core inflation declined to 3.1%. It was 3.3% in the month of June as headline inflation recorded at 3.3%.

Japan's Nikkei 225 declined 0.55% thus ending the week at 31,450.76. Topic ended 0.7% down at 2,237.29 soon after inflation data was released. Meanwhile, Hong Kong's Hang Seng index fell 1.97% and CSI 300 index fell 1.23% to end at 3,784.
European Markets ended lower on Friday as FTSE & DAX fell 0.7% each.

On Friday, the Dow Jones Industrial Average gained 0.07%, S&P 500 ended marginally lower, and Nasdaq Composite fell 0.2%. It is worth noting that Nasdaq dipped for 3 consecutive weeks for the first time since December 2022.

Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd said, "For the first time in 15 months, the Indian equity market fell for the fourth week in a row. Sensex, Nifty, and Nifty Bank Fall Nearly 1% each; 31 nifty stocks recorded losses, which can be attributed to profit booking in the Nifty metal sector and selling activity by foreign institutional investors (FIIs). An intriguing aspect is that, despite this downturn, the midcap and smallcap markets have maintained a bullish sentiment throughout this period."

As we approach a new week, several key factors will influence market dynamics. Macroeconomic indicators, trends in global stock markets, and FII activities will be pivotal in shaping market trends in the coming days. Domestically, the movement of the rupee against the dollar and the share of Jio Financial Services will be listed on the stock exchange on August 21. Jio Financial Services shares were credited to eligible RIL shareholders as of the record date of July 20 in the ratio of 1:1, added Pravesh Gour.

According to Pravesh Gour, in global markets, investors will closely monitor the movement of crude oil prices, the dollar index, and US bond yields. On the Marco front, the BRICS Summit will be held between August 22 and August 24. China will announce the loan prime rate for 1 year and 5 years on August 21. US Flash Manufacturing PMI, Flash Services PMI, and unemployment claims will be scheduled between August 23 and August 24.

"Technically, the Nifty index is exhibiting signs of weakness, characterized by a lower top formation. It is respecting its 50-day moving average (50-DMA), positioned around the 19270 mark. On the downside, immediate support rests at 19250. A breach below this level could expose Nifty to further declines, possibly targeting the 19191 and 18888 levels. Above 19460, we can expect some short covering towards the 19600 level. The re-establishment of bullish momentum hinges on a rebound above the 20-DMA, which lies at 19650," said Pravesh Gour.

Conversely, the Bank Nifty is displaying underperformance and has experienced a breakdown of a head and shoulder formation below the crucial support level of 44444. It is respecting its 100-DMA of 43600. Below this, 43300 is an immediate support level, while the 200-DMA around 42800 is a key support level. 44200 and 44500 are key hurdles on the upside.

Moreover, insights gleaned from the derivative market highlight a reduction in foreign institutional investors' (FIIs) long exposure in index futures, now at 42%. This suggests a prevailing short-term bearish inclination. Furthermore, the put-call ratio currently rests at 0.98, approaching levels that indicate potentially oversold conditions.
Oil prices remained steady on August 21 with Brent staying above $80 a barrel amid tightening supply pushed by OPEC+ cuts with concerns prevailing about global demand growth amid high interest rates.

Brent crude declined 8 cents to $84.72 a barrel by 0033 GMT. U.S. West Texas Intermediate crude was at $81.28 a barrel, up 3 cents.

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