Nifty50 may open flat on lack of directional cues

NEW DELHI: Domestic equity benchmarks are likely to open flat with mild optimism on Wednesday amid lack of directional cues from other Asian markets.

While no major economic data release is scheduled for the day, volatility is expected to rise as traders roll over their positions ahead of the expiry of December series F&O contracts on Thursday.

Data suggests marketwide rollovers stood at 50 per cent on D-2, compared with the average of 42 per cent in the last three series.

Nifty50 rollovers climbed to 48 per cent compared with 44 per cent seen in the last three series.
At 07:45 am, Nifty50 futures on the Singapore Stock Exchange were trading 2.5 points, or 0.03 per cent, lower at 7,935.50, indicating a flat opening for the domestic market.

Most Asian markets were trading mixed. Japan’s Nikkei was trading 0.54 per cent higher at 19,085. China's Shanghai Composite was up 0.11 per cent at 3,567.62. Other Asian indices, including Hong Kong's Hang Seng (up 0.03 per cent), South Korea's Kospi (down 0.15 per cent) and Taiwan's TWSE (up 0.02 per cent) were trading mixed. The S&P500 index in the US settled 1.06 per cent higher in overnight trade.

“Calendar 2015 would be the worst year in a long time in the emerging markets’ history in terms of performance, currency and FII outflows. Overall, when you look at things in that context, you see India has outperformed. Also, when you look at Nifty50, you get a sense that the market has not done well. But if you take out commodities and if you partially take out the state-owned enterprises, public sector banks and a few other enterprises, there has been a lot of action,” said Nitin Jain of Edelweiss Financial Services.

The NSE benchmark is down over 5 per cent in the ongoing year.

Technical analysts, meanwhile, see resistance for Nifty50 at around 7,980. “Nearer 7,900, in between 7,920 to 7,960, I do not think the strong resistance in the 7,960-7,980 range will be crossed in a hurry. I do not think the 7,900-7,880 range will be broken in a hurry. So this 70-80 points is where I expect Nifty50 to move over the next few sessions,” said Sandeep Wagle, Founder & CEO, Power My Wealth.

Some short coverings though are likely.

"Stochastic momentum oscillator is showing overbought readings on daily scale, indicating some profit taking is likely in the immediate near-term whereas the overall momentum remains in bullish mode," said Edelweiss Securities in a note.

A slump in commodity prices has sparked selling pressure in emerging market funds, which has also impacted inflows to India, which has so far seen outflows of Rs 3,500 crore this month.

“The way crude oil price is moving in the international markets, we are still expecting the market to probably move in a range. Come January, the market will probably start getting fixated about what happens with the Union budget. Clearly, earnings are going to be a pivotal point, which we do not see improving. So a rangebound market over the next few months is what we hope to see,” said Mayuresh Joshi of Angel Broking.