Nifty 50 continues lower for sixth consecutive trading sessions as the index corrects from two-month highs after India’s Finance Minister Nirmala Sitharaman announced a cut to corporate tax rates for domestic companies to 22%. The index has given up almost 50% of the gains that registered after the fiscal stimulus. Reserve Bank of India cut the interest rates by 25 basis point on Friday a move that failed to impress the Indian equity investors.
Nifty bullish momentum has canceled as the index trades below the 100 and 200-day moving average. Nifty recent rally stopped at two-month highs at 11,694 were started a fast correction to lower levels. On the downside Nifty 50 first support stands at 11,112 today’s low and then at 11,087 the 50-day moving average. Nifty has formed a strong floor at 10,681 since August which absorbed all the offers and signalled the rebound up to two-month highs. On the upside, immediate resistance is at 11,233 today’s high while more pressure will be met at 11,264 the 200-day moving average, a break above will open the way for a visit to 100-day moving average at 11,403. Traders looking to enter long positions can buy if the index closes above 11,233 daily top, targeting the 11,400 for profits, and can keep their long positions as far the index is trading above the 11,200 mark.
Asian indices ended higher; the Nikkei finished 0.99 percent higher at 21,587 as the Yen trades at 106.82. Hang Seng index ended 0.28 per cent higher at 25,893 while the Shanghai Composite finished 0.29 percent higher at 2,913.Download our latest quarterly market outlookfor our longer-term trade ideas.