Pre-market: Nifty seen opening lower; may retest support at 8290

NEW DELHI: The 50-share Nifty index is expected to open lower on Wednesday following muted trend seen in other Asian markets. Tracking the momentum, the index is expected to head lower, but may bounce back from its key support levels of 8,290-8,280.

At 07:30 a.m., Nifty India stock futures in Singapore were trading 35 points lower at 8,353, indicating a negative opening on the domestic market.

Selling pressure continued throughout the trading session to conclude the day with a loss of 97 points at 8340. The Sensex lost another 322 points and ended at 27,792.

"Nifty breached the support of 8420 in trade on Tuesday and confirmed further weakness. It now has support placed at 8290-8280 range, which is an important swing low on the charts as well as the 38.20% Fibonacci Retracement of the entire advance from 7723 till 8626," GEPL Capital said in a report.

"The level of 8420 would now act as a resistance for the index in the next few sessions," added the report.

The index has now broken below its crucial psychological support level of 8350, and the short-term trend is clearly on the downside which may push the index lower by another 150-200 points.

"It has been two days of sharp correction and it looks like that the trend is clearly on the downside, so if somebody has not exited long, it is bad news," said Mitesh Thacker, Technical Analyst, miteshthacker.com.

"We are eventually heading towards 8,200 to about 8,180 on the downside and that is where some kind of support and consolidation might happen; but, for the time being the trend is on the downside, use bounce backs to sell if you are holding only short positions, keep holding them," he added.

Overnight, US stocks ended flat as concerns about global weakness and political turmoil were offset by gains in technology and energy shares.

"Greece unnerved investors after the government brought a presidential vote forward in a political gamble that raised uncertainty over the country's transition out of its bailout," Reuters reported.

"Adding to the cautious tone was uncertainty over whether the US Federal Reserve will change its pledge to keep rates near zero for a "considerable time" when policymakers meet next week," added the report.

The Dow Jones industrial average .DJI fell 51.28 points, or 0.29 per cent, to 17,801.2, the S&P 500 lost 0.49 points, or 0.02 per cent, to 2,059.82 and the Nasdaq Composite added 25.77 points, or 0.54 per cent, to 4,766.47.

Asian shares were trading lower. Japan's Nikkei 225 index was trading 1.4 per cent lower at 17,564 and Hong Kong's Hang Seng index was trading 0.01 per cent higher at 23,486. China's Shanghai index was trading 0.13 per cent higher at 2,860.