FIRST TRADE: Nifty falls 73 points, Sensex down over 300 points

Indian equities in Tuesday's trade tracking weak global cues opened lower. At the start, the BSE 30-share Sensex fell 0.37 per cent or 301.7 points to 81,446.87, while the Nifty index was down 0.3 per cent or 73 points at 24,595.25.

Sectorally, in a mixed session, while most sectors traded in the red, IT, pharma, media and realty indices traded in the green with gains up to 0.7 per cent. IT and pharma indices gained amid depreciating rupee which marked a new low today.

The sharp spike in India’s trade deficit to $37.8 billion in November will put pressure on the rupee pushing it towards 85 to the dollar. Exporters like IT and pharma will benefit from depreciating rupee and for importers the import cost will increase. This will have an impact on their stock prices.

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said,  "Globally markets will be looking forward to the FOMC outcome on Wednesday. Markets have already discounted a 25bps rate cut and, therefore, the focus will be on the Fed chief’s commentary. Any departure from a dovish commentary will be a negative from the market perspective. This is only a remote possibility. The US  services PMI coming strong at 58.5 per cent indicates a resilient economy, which augurs well for the market."

Technicals

Akshay Chinchalkar, Head of Research, Axis Securities said, "Friday's highly volatile session saw the Nifty slump during the early part of the session, but the day's low occurred exactly at the falling neckline of the bullish head-and-shoulders pattern which was activated on December 3rd with an upside objective of 25,500. This objective remains valid as long as the market stays above 23,873, but more critical support now is the Friday low of 24,180."

Seasonal patterns also support a bullish view, as the Nifty has risen in the second fortnight of December -80 per cent of the time in the last decade, with an average gain of 1.1 per cent.

Asian markets

The MSCI Asia ex Japan index was down as investors remained cautious before a Federal Reserve meeting outcome this week, where the central bank is expected to cut rates but hint at a slower pace of easing.