Sensex, Nifty may open in positive territory

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Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 51 points at the opening bell. Overseas, Asian stocks traded lower on Tuesday, as various firms downgraded China’s GDP forecasts. Goldman Sachs on Tuesday slashed its China GDP growth expectations to 7.8%, down from the 8.2% previously forecast. Nomura also expected China’s GDP to grow by 7.7% this year, down from a previous forecast of 8.2%.

Profits at China’s industrial firms grew at a weaker pace in August from a year earlier. Profits rose 10.1% on year to 680.3 billion yuan ($105 billion) last month compared with a 16.4% gain in July. In US, the S&P 500 and Nasdaq indices ended lower on Monday with investors pivoting to value as tech shares, hurt by rising Treasury yields, weighed on equities in the quarter’s final week.

Domestic markets: Back home, benchmark indices ended almost flat after a volatile session on Monday. The barometer index, the S&P BSE Sensex, rose 29.41 points or 0.05% to 60077.88. The Nifty 50 index rose 1.90 points or 0.01% to 17855.10.

Foreign portfolio investors (FPIs) sold shares worth Rs 594.63 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,397.69 crore in the Indian equity market on 27 September, provisional data showed.

Shrikant Chouhan, head of equity research (retail), Kotak Securities said, “Both the key benchmark indices started on a firm note on Monday but could not capitalise on the sold start as investors traded with caution and followed other Asian peers. Auto stocks were the star performers in a sluggish session and the texture of the chart suggests Maruti, Tata Motors, and Bharat forge have formed a strong technical breakout formation and are likely to outperform in the near future. On intraday charts, the Nifty has formed a double top formation which indicates temporary weakness. However, the short-term trend is still positive.”

“For day traders, the 17,900 levels could be the immediate hurdle, and below the same, the correction wave could continue up to 17,750-17,710 levels. On the flip side, if the Nifty moves above 17,900, the uptrend continuation formation is likely to continue up to 17,950-18,000 levels,” he added.