A bull-bear tussle on the cards
We begin the week with sentiments badly torn between two extremes. On one hand are the dismal domestic IIP numbers for the month of August and the other is a report released on Sunday by the World Bank which slashed the growth forecast for India's current fiscal year to 6 per cent, down from 7.5 per cent. Just to put the numbers in perspective, IIP for the month of August contracted by 1.1 per cent, a 7 year low for this indicator. On the other hand the global markets are seen trading with optimism after a 'mini' trade deal between the US and China. Look out for flat opening and watch out for developments as they unfold. Do not overreact and initiate an impulsive position into the early deals, wait for markets to stabilize and trade with strict stop loss. On earning front, FMCG major Hindustan Unilever is scheduled to announce it earning today. SGX Nifty rests just below the important psychological 11,300 mark down by 10 points.
Asian markets are trading positive following US President Donald Trump's announcement of a partial trade deal with China. The US has agreed to suspend its next round of tariff hike on Chinese imports which was set to go into effect on 15th October. In return, China has pledged to rapidly increase purchase of American farm products. The China's Shanghai Composite has surged 1.08 per cent and the Hong Kong's Hang Seng index climbed 1.01. Markets in Japan are closed for a public holiday. Now, market participants will keenly watch out for the China's September trade data, which is due today and this could dictate the further course of action in the Chinese markets.
Back home, after opening the session with a gap-up the key benchmark indices surged about 1 per cent in early deals amid optimism over US-China trade talks. However, in the mid-morning trade, there was a dramatic change in trend as the markets gave up its gains and traded briefly into negative terrain. But, the bulls pounced back to end the session with decent gains. The 30-share benchmark index represented by Sensex rose 0.65 per cent, while, the 50-share index Nifty clocked gains of 0.63 per cent. In the broader market, both Nifty Midcap and Smallcap ended with modest gains of 0.12 and 0.52 per cent, respectively. Talking about the sectoral performance, barring Nifty Media and Nifty Private Bank, all other sectors witnessed buying interest with Nifty Metal and Nifty IT ending as top gainers.
In the US, stocks ended sharply higher on the final trading session of the week as President Donald Trump said the US had a 'substantial phase one deal with China' in the lengthy trade war between the world's two largest economies. At the closing bell, the Dow surged 1.2 per cent, the S&P 500 gained 1.1 per cent and the tech-heavy Nasdaq soared 1.3 per cent. European equities rallied strongly amid optimism surrounding progress on the US-China trade front and easing worries about Brexit after the meeting between British Prime Minister Boris Johnson and Irish Premier Varadeker have ended with positive signal from both sides with both men stating that they could see a pathway to a possible deal.