Pre-market: Nifty seen opening lower; may test 5900 levels

The 50-share Nifty index is expected to open lower on Wednesday tracking mixed Asian markets. Tracking the momentum, the index may test its crucial support level of 5900 in trade today as short term trend still remains bearish, say analysts.  At 07:30 a.m., Nifty India stock futures in Singapore were trading 29 points lower at 5907, indicating a soft opening on the domestic market.  The Nifty index extended its losing streak and closed below its crucial support level of 5940, as traders booked profits in realty, banks and auto on rate cut concerns  "Traders should note that the Nifty has registered breakdown from its head and shoulder pattern and going forward index has immediate support at 5910 levels," said Mitesh Thacker of miteshthacker.com.

 "Trading below which Nifty is likely to fill up the rising gap witnessed on 25th April 2013 placed in the range of 5844.30 - 5853.30 levels followed by 5770 levels," he added. Thacker is of the view that on the upside the Nifty has resistance at 5980 / 6000 followed by 6050 levels.  Nifty inched marginally higher in intradaytrade on Tuesday but was unable to sustain the gains and finally ended the day with a loss of 19 points at 5919.  "The index is now trading below the support level of 5940 and appears weak on the chart," said Swati A. Hotkar, Technical Analyst at LKP Advisory.  "The index may now correct till 5850-5840 range supported by 50-DMA over the next few sessions," she added.  Hotkar is of the view that the short term trend of the index would continue to remain weak in a positional basis.  Overnight, US stocks ended lower as investors sold growth-oriented sectors on speculation the Federal Reserve may reduce its economic stimulus.  "Analysts said recent declines are not surprising given this year's hefty rally, which had been driven partly by continued economic support from the Fed. The S&P 500 is still up 14.4 per cent for the year," Reuters reported.

 The Dow Jones industrial average was down 76.49 points, or 0.50 per cent, at 15,177.54. The Standard & Poor's 500 Index was down 9.04 points, or 0.55 per cent, at 1,631.38. The Nasdaq Composite Index was down 20.11 points, or 0.58 per cent, at 3,445.26.  Asian shares were trading mixed ahead of the key US jobs data later which will be out later this week.  "Investors have thus become even more cautious than usual before monthly nonfarm payrolls data due on Friday as the US central bank has made an improving jobs situation a precondition for softening its strong stimulus measures," said the Reuters report.  US crude futures were up 0.5 per cent at $93.73 a barrel.  Japan's Nikkei 225 index was trading 0.13 per cent lower at 13,516 and Hong Kong's Hang Seng index was trading 0.8 per cent lower at 22,111.12.  South Korea's Kospi index was trading 0.6 per cent lower at 1976.45. China's Shanghai index was trading 0.03 per cent lower at 2,271.63.

Source : Economic Times