Nifty 50 might see some weakness at open on the weekly expiry session, with Sensex also likely to kick off trade with minor cuts on Thursday, May 22, as investors sell global bonds, causing a meltdown in the debt markets.
At 7.10 am, the GIFT Nifty index was quoting 24,789, down 50 points or 0.14 percent.
Overnight, Wall Street settled in the deep red. The losses came as investors closely monitored a sweeping tax and spending bill currently progressing through the U.S. Congress, which could significantly widen the federal deficit.
The Dow Jones Industrial Average sank 1.91 percent, the broader S&P 500 slid 1.61 percent and the tech-heavy Nasdaq Composite declined 1.41 percent, with the three indices recording their worst day in one month.
Asian shares fell and Treasuries continued their slide at the open Thursday following losses in Wall Street on concerns about the US’s ballooning deficit. Japan's Nikkei 225, South Korea's Kospi and Kosdaq, along with Hong Kong's Hang Seng index tumbled over one percent each in trade.
In the previous session, Dalal Street experienced a volatile trading session. After a roller-coaster activity, the Nifty ended 130 points higher, while the Sensex was up by 410 points. Among sectors, almost all the major sectoral indices traded in positive territory, but the Defence index gained the most, rallying over 3.5 percent.
"Technically, the market faced resistance near 24,950 and corrected sharply. However, it eventually managed to close above 24,650, which is largely positive. We believe that the intraday market texture is non-directional, and as long as it is trading between 24,650 and 25,000, the range-bound texture is likely to continue. A breakout above 25,000 could push the market up to 25,100–25,150," said Shrikant Chouhan, Head Equity Research, Kotak Securities.
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