Indian equity markets are indicated to open lower on February 17 amid a decline in GIFT Nifty, selling pressure in banking shares, and mixed global cues.
GIFT Nifty futures were trading 73 points lower at 25,626 as of 7:55 a.m., indicating a subdued start for the benchmark Nifty 50 index. Asian markets traded mixed in early deals, while domestic indices are expected to open in negative territory.
In the previous session, markets had snapped a two-day losing streak and closed higher, with the Nifty settling above the 25,600 level. However, current signals point to renewed caution at the start of trade.
Pressure on Sensex and Nifty
Selling in the banking sector may weigh on frontline indices. The Sensex is estimated to decline by more than 200 points, while the Nifty 50 could slip below the 25,600 level. Market participants noted that the Nifty formed a bullish engulfing pattern on the daily chart, which is considered an indication of a potential reversal.
Technically, the pattern signals b bullish momentum, although prevailing global and domestic factors warrant caution.
Trade Deficit at Three-Month High
India’s trade deficit widened to $34.68 billion in January, marking a three-month high. The figure may influence investor sentiment. An increase in the trade deficit could have implications for the rupee and broader market conditions.
A faster rise in imports relative to exports affects economic balance. Investors are expected to monitor government policies and upcoming economic data.
IT Sector in Focus
The IT sector may remain in focus during the session. Amid mixed global cues and limited signals from US markets, volatility may be seen in IT stocks.
Performance of IT companies is largely influenced by US markets and the movement of the dollar. Participants may await clearer global direction.
Asian Markets Mixed
Asian markets traded mixed. Japan’s Nikkei 225 was down approximately 0.4 percent in early trade. Weak GDP data weighed on investor confidence and risk appetite.
In January, Japan’s imports rose 19 percent year-on-year to $71.24 billion, largely due to higher international gold and silver prices. Exports increased 0.6 percent to $36.56 billion, reflecting an imbalance in trade.
Australia’s S&P ASX 200 index was trading around 0.64 percent higher, indicating divergent trends across the region.
Limited Cues from US Markets
US markets were closed on Monday on account of Presidents Day. During the Asian session, US futures traded mixed, with Dow Jones futures largely flat, S&P 500 futures up 0.05 percent, and Nasdaq 100 futures down 0.07 percent.
The absence of a clear direction from US markets contributed to uncertainty in Asian and Indian equities.
Lunar New Year Impact
Stock exchanges in China, South Korea, Taiwan, and Singapore are closed for Lunar New Year holidays. The closure of major regional markets may affect Asian trading volumes, with lower volumes potentially resulting in higher volatility.
IPO Activity Continues
Activity continues in the primary market. The Fractal Industries IPO is in its second day of subscription and received 1.65 times subscription on the first day.
The issue will close on Wednesday, with a tentative listing date set for February 23.
