Nifty 50 December Futures (18,635)

Domestic benchmarks BSE Sensex and NSE Nifty 50 have opened lower on Thursday. The sell-off in the global equities following the US Federal Reserve’s rate hike decision is weighing on the Indian indices. The US Fed raised benchmark rates by 50 basis points in line with the market expectation. The central bank has indicated more rate hikes for 2023.

In early trade, Nifty was at 18,580, down 0.43 per cent, while Sensex was at 62,392, down 0.47 per cent. Nifty can extend the fall to 18,500-18,450 in the near-term if it remains below 18,600.

Global cues

All Asian major indices are trading in red. Hang Seng (19,449) and Kospi (2,374) are down over a per cent. Nikkei 225 (28,064) and Shanghai Composite (3,167) were down around 0.3 per cent each.

In the US, the Dow Jones Industrial Average (33,966) has declined and closed below 34,000. However, it has good support around 33,400. Only a strong break below 33,400 will bring it under pressure for a steeper fall to 33,000. The price action in the next few days will need a close watch.

Nifty 50 futures

The Nifty 50 December Futures (18,635) is down 0.6 per cent. The contract looks vulnerable for a fall to 18,580 and 18,530-18,500 in the coming sessions. Key intraday resistance will be at 18,660. Only a strong rise past this hurdle will ease the downside pressure and take the contract up to 18,730 and higher levels.

Trading strategy

Traders can go short at current levels. Accumulate shorts at 18,655. Keep the stop-loss at 18,675. Trail the stop-loss down to 18,610 when the contract falls to 18,590. Move the stop loss further down to 18,575 when the contract touches 18,560. Book profits at 18,545.

Supports: 18,580, 18,530

Resistances: 18,660, 18,730

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