BSE Sensex and NSE Nifty are likely to remain under pressure on Thursday amid global gloom. The US stocks came under renewed pressure overnight, amid banking woes, the US Federal Reserve’s action of 25 basis points increase and indication that it would be its last in this cycle were as expected, but reports that one more bank, PacWest Bancorp, is mulling putting itself up for sale spoiled the mood.

“The Fed’s tenth straight rate hike will likely be the last one in this cycle. The Fed is concerned that tighter credit conditions will weigh on economic activity and hiring, while helping maintain disinflation trends. Credit tightening is about to cripple the economy and it appears that as long as we do not get a perfect storm of hotter-than-expected labour and inflation data, the Fed will keep rates on hold for at the very least till the end of the year,” said Edward Moya of The Americas, OANDA. The Dow Jones Industrial Average edged down 0.80 per cent, while S&P-500 and Nasdaq fell 0.7 per cent and 0.5 per cent, respectively.

Service PMI zooms

SGX Nifty at 18,100 indicates another gap-down opening for Nifty; Nifty futures, on Wednesday, closed at 18,150. Analysts, however, expect the domestic market to remain in the consolidation phase given the strong macroeconomic data. After a healthy GST number of ₹1.87-lakh crore, India’s services activity and new business rose at the fastest rates since June 2010, according to a monthly survey. The seasonally adjusted S&P Global India Services PMI Business Activity Index surged from 57.8 in March to 62 in April, its fastest expansion in output since mid-2010. The S&P Global India Composite PMI Output Index rose from 58.4 in March to 61.6 in April, its highest mark since July 2010.

Also read: Adani Group stocks under selling pressure

Meanwhile, the India VIX has ended at 11.80, indicating volatility has dropped out for the coming days. For the time being, the trend may continue to be optimistic, but profit taking from higher levels is also anticipated, according to marketmen.

Open interest data

Open interest data indicate, on the call side, the highest OI was witnessed at 18,200 followed by 18,300 strike prices, while on the put side, the highest OI remains at 18,000 followed by 17,900 strike price, said Choice International.

According to analysts, the action will be in mid and small-cap space, where buying interest emerges. Besides, the focus will be on stocks that come out with results, they said.

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd, saidon the domestic side, the market structure remains positive on the back of healthy macro data, strong earnings, and FIIs buying over the last few days. Several PSU stocks from across sectors like railway, defence, and capital goods have been in strong momentum last few days.

Related Topics