Pre-market: Weak start likely, Rupee movement eyed

The Nifty is likely to seek support around 5,850-5,830 and face resistance around 5,905-5,925

Markets are likely to open flat with a negative bias as investors are likely to remain cautious ahead of April industrial output and consumer price index-based inflation data on Wednesday. Further, worries that foreign institutional investors may resort to selling index heavyweights amid a weakening rupee will continue to weigh on market sentiment.

Shares on Wall Street took a breather and ended flat on Monday after sharp gains over the weekend even as Standard Poor’s revised United States’ credit outlook to stable from negative. The Dow Jones Industrial Average ended down 9 points at 15,239. S&P 500 ended flat at 1,643 and Nasdaq Composite ended up 4 points at 3,474.

 
Asian stocks were steady in early trades with Japan’s Nikkei pausing after sharp gains on Monday as investors focus on Bank of Japan’s two-day policy meet which ends today. Singapore’s Straits Times and Taiwan Weighted were down 0.1 per cent each.

At 7:00 hrs Indian Standard Time the SGX Nifty was down 16 points at 5,891.

According to technical experts, the bias in the near term is likely to favour the bears as long as the NSE index remains below 5,900. On the downside, the Nifty can test its long-term (200-DMA) at 5,792. On Tuesday, the NSE index is likely to seek support around 5,850-5,830, while face resistance around 5,905-5,925.

Stocks to Watch

IT shares may continue to gain amid a weakening rupee. The rupee on Monday slumped by a staggering 110 paise to life-time low of 58.16 against dollar, making the struggling economy further vulnerable as imports become costlier, inflation risks rise and record high CAD worsens.

GMR Airports Limited, a subsidiary of GMR Infrastructure, has acquired 17.03% stake in Delhi Duty Free Services at Indira Gandhi International airport for an undisclosed sum.

Even as Ranbaxy-manufactured medicines continue to be under the scanner following the recent events, the US Food and Drugs Administration (FDA) says before it imposed an import alert on the company’s three key Indian facilities in 2008, it had “sampled and tested” the products that were in the US market. The regulator did not find any failures in the tests, it has said.

YES Bank late Monday said its shareholders have approved $500 million fund raising plan during the current year. The move will allow the banks’ promoters to pare their stake and diversify its capital sources.