US Inflation Eases, Fed Decision Tonight - Pre Market Analysis

Here are some of the major updates that could move the markets today:

Stocks

HDFC Bank said it has received approval from exchanges for transfer of non-convertible debentures (NCDs) to its subsidiary HDFC Bank. This is part of its plan to facilitate merger of HDFC with HDFC Bank.

UltraTech Cement has commissioned of 1.9 mtpa greenfield clinker backed grinding capacity at Pali cement works, Rajasthan.

Axis Bank has received board approval for allotment of 12,000 non-convertible, Basel III compliant Tier II bonds of the face value of Rs 1 crore each.

Yes Bank  said private equity majors Carlyle Group and Advent have picked up 9.99 per cent stake in the bank.

Bank of Baroda  plans to sell its majority stake in Nainital Bank.

What to Expect?  

NIFTY opened with a small gap-up at 18,530 and took support at 18,500. The index moved up and closed at 18,608, up by 111 points or 0.6%.

BANK NIFTY opened with a small gap-up at 43,809 and faced resistance just below 44K. The index closed at 43,947, up by 238 points or 0.54%.

IT moved up by 1.1%.

The US markets moved up and the European markets closed well in the green.

The Asian markets are trading in the green.

The U.S. Futures and European futures are trading higher.

SGX NIFTY is trading at 18,805 indicating a gap-up opening.

NIFTY has supports at 18,565, 18,500 and 18,425. We can expect resistances at 18,615, 18,665 and 18,730

BANK NIFTY has supports at 43,850, 43,770 and 43,500. Resistances are at 44,000, 44,200 and 44,500.

NIFTY has the highest call OI build-up at 19,000. The highest put OI build-up is at 18,500.

BANK NIFTY has the highest call OI build-up at 44,000. The highest put OI build-up is at 43,500. 

Foreign Institutional Investors net-bought shares worth Rs 600 crores. Domestic Institutional Investors net-bought shares worth 40 crores.

INDIA VIX dropped to 12.9.

US inflation dropped to 7.1%. It is lower than the expected 7.3%. This led to the up-move in the US markets but there was profit booking especially in the heavyweights.

We have Fed interest rate decision tonight. It is expected that there will be a 50 basis points hike. It will be a fall if there is a 75 basis points hike.

Since NASDAQ rallied the previous day, IT also moved up. Let us see if the move continues today. HCL Tech has a big gap to fill on the upside, which was formed on news regarding management’s projection.

Crude oil prices crossed $80 once again with supply concerns after US-Canada pipeline disruption and US inventory build-up.

Is this the beginning of the next impulsive move after the pull-back we have got? Since the rally was big, pull-back also could be steep. But there is uncertainty today as there is Fed interest rate decision tonight.

India's Wholesale Price Inflation and UK CPI also will be out today.

I will be closely watching 18,570 on the downside and 18,730 on the upside in NIFTY.

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