Pre-market: Nifty seen opening higher; may hit fresh record highs

NEW DELHI: The 50-share Nifty index is expected to open higher on Tuesday following positive trend seen in other Asian markets. Tracking the momentum, the index is expected to surpass its previous record high of 8180.20 hit on 08 September 2014.

At 07:30 a.m., Nifty India stock futures in Singapore were trading 3 points higher at 8,193 indicating positive opening on the domestic market.

Nifty resumed its upside after a breather of couple of days and concluded at a new life high of 8,173 on a closing basis on Monday. In the immediate term the level of 8040 has now emerged as an important support.

"As long as this support is held there is a possibility that the present upside may stretch higher till 8227 - 8259 range. However, the index appears highly overstretched on the upside and thus we recommend a trailing stop loss of 8040 for all long positions," GEPL Capital said in a report.

"A move below 8040 would be the initial sign of weakness which will be confirmed only if the Nifty breaks 7920," added the report. The brokerage firm maintains a cautious view at these lofty levels.

Overnight, US stocks ended lower after a drop in energy shares, while the Nasdaq edged higher with Yahoo. The S&P 500's decline followed a record close on Friday

"Recent market momentum has been driven by accommodative Fed policy, including bond purchases and low interest rates," Reuters reported.

Research from the San Francisco Federal Reserve indicated investors expect rates to stay low for longer than the central bank itself does, added the report.

The Dow Jones industrial average fell 25.94 points or 0.15 percent, to 17,111.42, the S&P 500 lost 6.18 points or 0.31 percent, to 2,001.53 and the Nasdaq Composite added 9.39 points or 0.2 percent, to 4,592.29.

Asian shares were trading mixed. Japan's Nikkei 225 index which was trading 0.46 per cent higher at 15,777 and China's Shanghai index was trading 0.20 per cent lower at 2,321.