Flat start likely for the markets
After days of relentless correction, bulls can finally heave a sigh of relief on Monday at least at the opening bell as early cues from SGX Nifty is indicating markets may began the session in the green, however, the gains are miniscule as SGX is trading with an uptick of 8 points at 11,214 levels. The week gone by was the worst week for the markets since May. Nifty registered a fall of 2.93 per cent and it breached its 200-DMA on Friday. Broader markets continued to underperform the frontline gauges. Nifty Midcap and Smallcap were down by 4.3 and 4.7 per cent, respectively. The FPIs continued to be in sell mode and sold shares to the tune of Rs. 2792 crore. As far as action is concerned in the markets, we believe markets are expected to trade in a broad range and wait for the next bigger trigger that will come in the form of earning season, which is round the corner. ‘Results’ will be the key word for the markets over the next few weeks or rather a month or so from October 10.
No clear trend has emerged in Asian markets in early deals on Monday as stocks are seen trading mixed despite a strong close on Wall Street on Friday. Market participants are seen anxious ahead of the trade talks between the US and China, which will probably take place later this week. Also, markets in Hong Kong and China are closed on Monday for holidays. Meanwhile, the Japan’s Index Nikkei 225 has shed 0.29 per cent.
Back home, key barometers started off the session on an upbeat note on Friday, however, thereafter, markets failed to make any progress and turned volatile as traders turned anxious ahead of the RBI policy and once the wise men of the monetary policy committee of RBI let the cat out of the bag, it was one way slide for the markets. The key barometers ended at the lowest point of the day and lost over a per cent. Market sentiment was dented after central bank sharply cut the GDP project for FY20 to 6.1 per cent from 6.9 per cent and also, it slashed the repo rate by 25 bps which was already factored in by the markets. At the end, Nifty dropped 1.23 per cent to 11,175 and BSE Sensex plunged 1.14 per cent to settle at 37,673. The broader markets ended in the red with Nifty Midcap and Smallcap losing 0.90 and 1.17 per cent, respectively. Talking about sectoral indices performance, barring Nifty IT, all other sector indices were under selling pressure with Nifty Media, Nifty Bank and Nifty Private Bank ending as the top losers. Advance-decliners ratio was skewed towards decliners.
On Wall Street, stocks rallied strongly on Friday after data showed that nation’s unemployment rate fell to a level not seen since December 1969. This probably helped the investors to overcome their fears about a worse outcome. At the end of the day, Dow and the S&P 500 Index surged 1.4 per cent each and the tech-heavy Nasdaq Composite also soared about 1.4 per cent. Meanwhile, stocks in Europe also ended on a high note after a lukewarm employment numbers left room for the Federal Reserve to slash interest rates, quite possibly at its meeting later this month. The Germany’s DAX and France’s CAC 40 rose 0.73 and 0.91 per cent, respectively, while, the UK’s FTSE jumped over a per cent.