Asian equities mostly ended the final trading session of August lower as sentiment weakened following the latest escalation in Middle East tensions, with crude oil prices jumping sharply.
Adding to the cautious mood, global bond yields climbed to multi-year highs as investors braced for the possibility of a rate hike by the US Federal Reserve following comments on Friday by Fed Chairman Kevin Warsh about bringing down inflation despite possible short-term pain for the economy.
Japan’s benchmark Nikkei 225 fell 0.14% to 66,311, while Australia’s S&P/ASX 200 slipped 0.18% to 9,076. South Korea’s Kospi, however, bucked the broader trend and jumped 0.46% to 6,820.
Hong Kong’s Hang Seng closed with marginal losses at 25,566, while the Shanghai Composite edged up 0.86% to 3,986.
In the domestic market, the frontline indices remained under pressure throughout the session. Despite multiple attempts to recover from the day’s lows, buying momentum failed to sustain, with the Nifty 50 eventually settling 0.39% lower at 24,080. The Sensex also lost 0.40% to close at 76,957.
The weakness also dragged down the benchmarks’ monthly performance, with both indices wrapping up August with losses of more than 1.40%, snapping their two-month winning run. Meanwhile, the broader markets remained mixed, with the Nifty Midcap 100 gaining 0.24%, while the Nifty Smallcap 100 fell sharply by 0.74%.
Concerns over crude oil prices remained at the forefront after oil surged more than 3% following the US strike on Sunday, which ended a lull in fighting in the war that has now lasted for more than six months. The Trump administration has also announced a new economic campaign against Iran, raising concerns over a further escalation in the conflict.
Investor sentiment was further tempered by caution ahead of the MSCI index rebalancing at the close—the first major test of the new closing auction mechanism—which added to expectations of heightened end-of-session volatility, said Ponmudi R, CEO of Enrich Money.
KOSPI, Dow Jones, TAIEX, Hang Seng, and Nikkei: Key levels to watch
According to Mahesh M. Ojha, VP — Research and Business Development at KC Securities, the Nikkei faces resistance at 66,420, 66,828, and 67,250, while key support levels are placed at 65,990, 65,590, and 65,160.
For South Korea’s KOSPI, Ojha sees resistance at 6,865, 6,945 and 6,988, with support levels positioned at 6,745, 6,700 and 6,620.
Meanwhile, Ojha expects Hong Kong’s Hang Seng Index to face resistance at 25,720, 25,850 and 26,000+, while support is seen at 25,400, 25,260 and 25,120.
For Taiwan’s market, he identified resistance levels at 46,580, 46,820 and 47,080, while support levels are placed at 46,076, 45,820 and 45,570.
On Wall Street, Ojha said the Dow Jones Industrial Average faces resistance at 53,740, 53,905 and 54,100, while key support levels are seen at 53,370, 53,160 and 53,000.
Analysts see a possible Nifty pullback as Bank Nifty gains momentum
According to Rupak De, Senior Technical Analyst at LKP Securities, Nifty continues to remain weak as it trades below the critical moving averages. De said the index found initial resistance around the recent low. However, he noted that the RSI has formed a positive divergence on the hourly chart, indicating a possibility of a near-term pullback.
In the near term, De said the index may witness a minor pullback towards 24,180–24,200, although the higher levels are likely to act as resistance. According to De, a sustained move above 24,200 could trigger a further rise of around 100 points. On the downside, he said support is placed at 23,990, while a sustained break below this level could resume the correction in the market.
Meanwhile, Vatsal Bhuva, technical analyst at LKP Securities, said Bank Nifty closed with a long bullish candlestick, supported by strong buying during the closing auction session. Bhuva noted that, technically, the index has closed at its falling trendline resistance while sustaining above its crucial 50 DMA and 200 DMA.
According to Bhuva, the RSI has also entered a bullish crossover, indicating improving momentum. However, he cautioned that as the sharp move was largely witnessed during the closing auction session, a follow-up buying session is essential to confirm the sustainability of today’s breakout attempt. Bhuva said immediate resistance is placed at 58,200, while support is seen at 57,300.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
