Pre-market: Nifty seen opening higher; may reclaim 7900 levels

NEW DELHI: The 50-share Nifty index is expected to open higher on Monday following positive trend seen in other Asian markets and SGX Nifty. Tracking the momentum, the index is expected to reclaim its crucial psychological level of 7,900 in trade today.

At 07:30 a.m., Nifty India stock futures in Singapore were trading points 124.50 higher at 7,943.50 indicating a gap-up opening on the domestic market.

Benchmark indices bounced back strongly on Friday supported by strong global cues. BSE's Sensex ended 109.19 points higher and closed at 26108.53, while NSE's Nifty rose 31.50 points to close at 7,779.7.

The weekly close for Nifty was still lower by just over a 1 per cent from previous week. The index ended below the key support level of 7,840 on a weekly closing basis, which confirms further weakness till at least 7,660.

The decline is highly possible as the price has confirmed the reversal after the warning signs that were in place for several weeks on the weekly chart in the form of negative divergences registered by the momentum measures.

"We recommend avoiding fresh longs till the time Nifty trades below the level of 7930. On any bounce back the index may now face resistance near 7,800 to 7,840 range," GEPL Capital said in a report.

"Higher up the level of 7,930 is a very strong resistance for the index and weakness would persist till the time 7,920 is not conquered decisively," added the report.

On Friday, US markets climbed more than 1 per cent, though the S&P 500 index posted its fourth straight weekly decline.

"The upbeat U.S. data has brought some calm to markets after a week of turbulence as signs of softening global growth rattled investors, sending volatility spiking to levels not seen in years," Reuters reported.

The Dow Jones industrial average fell 24.5 points, or 0.15 per cent, to 16,117.24, the S&P 500 gained 0.27 points, or 0.01 per cent, to 1,862.76 and the Nasdaq Composite added 2.07 points, or 0.05 per cent, to 4,217.39.

Asian shares were trading higher. Japan's Nikkei 225 index which was trading 0.02 per cent higher at 14,741 and Hong Kong's Hang Seng index was trading 0.33 per cent higher at 22,982.

South Korea's Kospi index was trading 0.02 per cent higher at 1,916 and China's Shanghai index was trading 0.56 per cent lower at 2,342.