SGX market indicates a gap down opening for Sensex, Nifty

Domestic markets are likely to come under pressure on Wednesday as US debt ceiling talks continue to deteriorate.

SGX Nifty at 18,280 indicates a gap opening for the local markets; Nifty May futures closed Tuesday at 18,358 and June futures at 18,434.

Besides, the market is technically overbought and needs a healthy correction, analysts said. They added that the markets remain volatile due to global events and ahead of the May contract settlement, as traders indulge in rollovers.

All major indices – Dow Jones Industrial Average, Nasdaq, and S&P500 are down sharply between 0.7 percent and 1.3 percent.

US stocks drop as debt ceiling talks hit a major hurdle and the latest round of economic data suggests that the process of lowering inflation will start to struggle.

“Also affecting sentiment is the Sino-US confrontation that could add pressure in the chip space,” said Edward Moya, senior market analyst at The Americas OANDA.

Tracking US stocks, stocks in the Asia-Pacific region fell by about 0.2-0.4 percent.

Despite the global gloom and the imminent settlement of monthly F&O contracts on Thursday, analysts expect markets to remain volatile and action on equities to continue. They added that the continued faith imposed by foreign portfolio investors is likely to keep the market relatively stable.

“We expect the sector to continue to rotate, with mid-caps gaining strength in particular,” said Siddhartha Kimka, Head of Retail Research, Motilal Oswal Financial Services Limited.

“Call writers were seen exiting at 18,300, 18,200 and 18,100 strikes while writers placed positions that built solidly at 18,400 and 18,500 strikes, suggesting support is getting stronger at lower levels,” said Ashwin Ramani, derivatives and technical analyst at SAMCO Securities. .