“Key Insights for Today’s Stock Market Opening“
Foreign institutional investors (FIIs) have divested shares worth Rs 1,725.11 crore, while domestic institutional investors (DIIs) have acquired stocks worth Rs 1,077.86 crore on September 5, according to provisional data from the National Stock Exchange (NSE). As for today, the benchmark Sensex and Nifty indices are poised to open slightly lower on September 6, based on trends in the GIFT Nifty, which indicates a negative start for the broader index with a 7-point loss.
In the previous trading session, the market experienced its third consecutive gain, with the BSE Sensex advancing by 152 points to reach 65,780, while the Nifty50 climbed 46 points to 19,575. On the daily charts, it formed a small bullish candlestick pattern, marked by a continuous pattern of higher highs and higher lows, and maintaining its position above the downward sloping resistance trendline.
Rupak De, Senior Technical Analyst at LKP Securities, commented, “The Nifty has successfully broken out of a descending channel on the daily chart. The bullish trend will persist as long as the Nifty remains above 19,440.”
According to the pivot point calculator, the Nifty is expected to find support at 19,539, followed by 19,525 and 19,501. Conversely, 19,501 could act as a significant resistance level, with potential levels at 19,600 and 19,624.
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GIFT Nifty futures indicate a slightly negative start for the broader index, with a 7-point loss, settling at 19,667 points after reaching a high of 19,679 points.
Trade Setup for Wednesday: Key Information Before the Opening Bell
US Markets
On Tuesday night, S&P 500 futures traded nearly flat as Wall Street appeared to move beyond the initial losses that marked the start of the holiday-shortened trading week. Futures linked to the broad index and Dow Jones Industrial Average showed minimal changes, while Nasdaq 100 futures experienced a 0.1 percent decline.
These movements followed a downbeat session on Wall Street, where the Dow closed nearly 200 points (approximately 0.6 percent) lower, while the S&P 500 and Nasdaq Composite saw losses of 0.4 percent and nearly 0.1 percent, respectively.
One contributing factor to this decline was rising oil prices, which surged after Saudi Arabia and Russia extended their voluntary supply cuts. West Texas Intermediate futures rose by over 1 percent and briefly exceeded $87 per barrel, reaching their highest level since November. This development raised concerns about potential impacts on the Federal Reserve’s interest rate decisions, as rising oil prices can contribute to inflation.
European Markets
European stock markets concluded on a lower note on Tuesday, losing the momentum they had gained from Chinese stimulus measures. The Stoxx 600 index ended the day 0.2 percent lower. Notably, chemical stocks experienced a 1.2 percent decline, while oil and gas stocks gained 1.2 percent.
This drop in European markets followed a flat closing in stock markets on the previous day, which had lost steam after some of China’s major banks reduced interest rates on various deposits. In the Asia-Pacific region, stocks also declined as traders assessed weak Chinese services data, and U.S. markets followed suit after Labor Day.
Danish drug maker Novo Nordisk, which recently launched its weight loss drug Wegovy in the U.K., saw its stock rise by 1 percent, extending its lead as Europe’s most valuable firm. This marked a significant achievement as it surpassed luxury goods giant LVMH, with Novo Nordisk achieving a market capitalization of approximately $428.3 billion, including unlisted shares, compared to LVMH’s $417.86 billion, as per LSEG data.
Asian Markets
S&P 500 futures remained relatively unchanged on Tuesday night, with Wall Street seemingly looking beyond the initial losses of the holiday-shortened trading week. Futures related to the broad index and Dow Jones Industrial Average showed minimal fluctuations, while Nasdaq 100 futures experienced a 0.1 percent decline.
The trend followed a downbeat session on Wall Street, where the Dow concluded the session nearly 200 points (around 0.6 percent) lower. Similarly, the S&P 500 and Nasdaq Composite saw losses of 0.4 percent and nearly 0.1 percent, respectively.
As mentioned earlier, this decline was partly attributed to rising oil prices, which surged after Saudi Arabia and Russia extended their voluntary supply cuts. West Texas Intermediate futures rose by over 1 percent, briefly exceeding $87 per barrel, reaching their highest level since November. These developments raised concerns about potential impacts on the Federal Reserve’s decisions regarding interest rates.
Investors will closely monitor economic data in the U.S. on Wednesday, including morning updates on the U.S. trade deficit and the services industry. Additionally, a new beige book summarizing economic activity will be released in the afternoon.
G20 Troika and Global South
Prime Minister Narendra Modi, in an exclusive conversation with Network18, highlighted the significance of the G20 troika, which comprises Indonesia, India, and Brazil, all representing the Global South. This marks the first time that the G20 troika includes three members from the developing world.
Modi emphasized that this composition could substantially advance the interests of the developing world, especially during a period marked by increased global geopolitical tensions. India has been a vocal advocate for the Global South and consistently raises their concerns in various multilateral forums, including the G20.
The prime minister emphasized India’s empathy for these countries, given its own status as a part of the developing world. He stated that India understands the aspirations of these nations.
Pre-sanctioned Credit Lines on UPI to Accelerate Transactions
The Reserve Bank’s decision to allow banks to issue pre-sanctioned credit lines on the Unified Payments Interface (UPI) system is expected to accelerate transaction growth, according to UCO Bank MD and CEO Ashwani Kumar. Notably, UPI transactions have reached 10 billion in a month, with expectations of reaching 20 billion within 18-24 months, based on recent data from the National Payments Corporation of India (NPCI).
Kumar noted that this had been a long-standing demand from customers, and its availability is expected to drive increased adoption of UPI. However, he highlighted the need for banks to implement the necessary technology to make this feature accessible to their customers.
Extension of Credit Lines in the UPI System
The Reserve Bank of India (RBI) announced that the UPI system will now encompass pre-sanctioned credit lines issued by scheduled commercial banks for transactions. Previously, the UPI system only allowed transactions using the deposited amount.
In its circular, the RBI stated, “Under this facility, payments through a pre-sanctioned credit line issued by a Scheduled Commercial Bank to individuals, with the prior consent of the individual customer, are enabled for transactions using the UPI System.”
Kumar additionally mentioned that payment banks would play a significant role in India’s discussions on cross-border transactions and the internationalization of the rupee.
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