GIFT Nifty indicated that Indian equity indices BSE Sensex and NSE Nifty 50 may see a positive opening on Wednesday. Here’s a look at things to know before markets open today.
GIFT Nifty traded up by 75 points or 0.31% at 24,120 indicating a positive opening for domestic indices NSE Nifty 50 and BSE Sensex on Wednesday. Previously, on Tuesday, the NSE Nifty 50 ended down by 63.05 points or 0.26% to settle at 23,992.55 while the BSE Sensex plunged 166.33 points or 0.21% to 78,593.07.
“Markets traded volatile after Monday’s decline and settled marginally lower amid mixed signals. Initially, a recovery in global indices prompted a gap-up start, but pressure on heavyweights, particularly in the banking sector, erased the gains. Meanwhile, a mixed sectoral trend kept traders engaged, with realty, IT, and metal sectors edging higher while banking and auto sectors ended lower. The broader indices traded lackluster and closed slightly down,” said Ajit Mishra – SVP, Research, Religare Broking.
Mishra also added that the Nifty is attempting to defend the short-term moving average, the 50 DEMA, but the overall sentiment remains negative. Mixed global cues may continue to cause volatile swings. Amidst this uncertainty, traders should limit their positions and adopt a hedged approach until stability returns.
Key things to know before share market opens on August 07, 2024
Wall Street
The S&P 500 and Nasdaq ended 1% higher on Tuesday as investors jumped back into the market a day after a dramatic sell-off, with recent comments by Federal Reserve officials easing U.S. recession worries. The Dow rose as well, but all three major stock indexes pared gains heading into the close and ended well off their highs of the day, reported Returns. The tech-heavy Nasdaq Composite ended up by 166.77 points or 1.03% at 16,366.85. The S&P 500 ended higher by 53.70 points or 1.04% at 5,240.03, while the Dow Jones Industrial Average is up by 294.39 point or 0.76% at 38,997.66.
Centre Revisits Decision on Indexation Benefits for Property Transactions
In a relief to the real estate sector, the Centre has decided to revisit its decision to scrap indexation benefits on property transactions following widespread backlash from various stakeholders in the realty space. The central government has moved an amendment to the Finance Bill, 2024, allowing individuals to choose between a 12.5% long-term capital gains tax rate without indexation or a 20% rate with indexation for properties acquired before July 23, 2024. This change enables taxpayers to compute which option is more beneficial for them when selling land or buildings acquired before the specified date.
Indexation adjusts asset purchase prices based on inflation, thereby reducing taxable gains. The removal of this benefit could have increased the tax burden for sellers. Under the new scheme, taxpayers can opt for a reduced long-term capital gains tax rate of 12.5% without indexation, compared to the old scheme’s 20% rate with indexation. This amendment provides flexibility for taxpayers to determine the most favorable tax computation method for their property transactions.
US Dollar
The US Dollar Index (DXY), which measures the value of the dollar against a basket of six foreign currencies, traded up by 0.13% at 103.01.
Crude Oil
WTI crude prices are trading at $72.94 down by 0.37%, while Brent crude prices are trading at $76.21 down by 0.36%, on Wedesday morning.
Asian Markets
Shares in the Asia-Pacific region are trading in mixed territory on Wednesday morning. The Asia Dow is trading up by 4.07%, where as the Japan’s Nikkei 225 is trading in red, down by 2.24%, South Korea’s KOSPI index is traded higher by 0.95% and the benchmark Chinese index Shanghai Composite trading in green, up by 0.14%.
FII, DII Data
Foreign institutional investors (FII) offloaded shares worth Rs 3,531.24 crore, while domestic institutional investors (DII) mopped shares worth Rs 3,357.55 crore on August 06, 2024, according to the provisional data available on the NSE.
F&O Ban
The NSE added Hindustan LIC Housing Finance, Manappuram Finance, Aditya Birla Capital, Birlasoft, Chambal Fertilisers and Chemicals, GNFC, Granules India, Hindustan Copper, India Cements, IndiaMART InterMESH, RBL Bank in the F&O Ban on August 07, 2024.
Technical View
Commenting on the Technical outlook of Nifty Rupak De, Senior Technical Analyst, LKP Securities, said that Nifty formed an inverted hammer pattern on the half-hourly chart, suggesting a possible bullish reversal of a smaller degree. Also, the index seems to have found support above yesterday’s low. Now, two things might happen: one, the Nifty might recover towards 24400-24440 (21EMA), where selling pressure is likely to occur once again; or, it might fall straight away to 23965 (50EMA)/23650.
Bank Nifty Outlook
“The bank Nifty continued to decline and also breached the previous session low indicating continuation of the weakness. We expect the Bank Nifty to drift lower towards 47650 – 47500 where the 200-day moving average is placed. The 20 week moving average is placed at 49800, which can provide some relief however rallies towards 50400 – 50500 should be used as a selling opportunity,” said Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas.