Flat start likely despite positive global cues

The stock markets around the globe are seeing dancing to the bullish tunes after Chinese statement that it would not immediately retaliate against the latest round of tariffs announced by President Donald Trump and officials from China stated they are willing to solve the problem with a calm attitude. The SGX Nifty in early action is indicating a flat start. Market participants will be keenly keeping an eye on the economic data such as Q1FY20 GDP numbers, infrastructure output and bank loan growth, which will be unveiled after market hours on Friday.

A green day for the major Asian stock markets on Friday following strong gains on the Wall Street overnight amid signs that Beijing is open to a resolution of its trade war with the US. Hong Kong’s Hang Seng has gained 1.18 per cent, the Japanese stock index Nikkei 225 has advanced 0.80 per cent and China’s Shanghai Composite has risen 0.52 per cent.

Back home, the markets began Thursday’s session on a weak note and stayed in the negative terrain for the entire session. There was an intra-day attempt for a recovery in the afternoon session, but it got sold into as well. The BSE Sensex plunged 1.02 per cent to 37,069 and Nifty closed down by 0.89 per cent below the 10,950 mark. The broader market indices ended in the red as well, with Nifty Midcap and Smallcap losing 0.36 per cent and 0.87 per cent, respectively. On the sectoral front, Nifty Pharma gained the most, followed by Nifty Metal, Nifty Realty and Nifty IT. On the flip side, Nifty PSU Bank, Nifty Financial Services, Nifty Bank were top losers

The US markets ended on a buoyant note on Thursday, riding on positive comment from Gao Feng, a spokesman for China’s Ministry of Commerce. Feng stated that his country rejects an escalation of the trade war and is willing to solve the problem with a calm attitude. On the economic front, there were lot of announcements as the Q2 GDP was revised slightly lower, but met with the estimates and as the weekly initial jobless claims inched up to 215,000. Meanwhile, the pending home sales fell in July, reversing the course of two consecutive months of gains. The Dow and the S&P 500 indices soared 1.3 per cent each and the Nasdaq surged 1.5 per cent. 

The European indices ended Thursday’s session firmly in the positive terrain as China hinted that it will not retaliate now on the new US tariffs. Germany’s DAX rose 1.18 per cent, France’s CAC 40 jumped 1.51 per cent and UK’s FTSE 100 ended up by 0.98 per cent.