Flat start likely, stock specific movement to continue

This Thursday morning, the big news is that US President and Chinese Vice-Premier have signed a ‘phase one’ trade deal in Washington. However, the early trend indicates that the Indian markets are not much cheerful about this deal as signing of deal was on expected lines and domestic markets are expected to witness a flat start.  Nevertheless, if we analyse the markets of past one week or so, the real action is in the broader markets and we expect it to continue, hence, stock specific movement would be the theme of the day. Meanwhile, SGX Nifty is trading down by 6 points at 12,353 levels.  

Majority of the Asian markets were trading in green on Thursday on the back of positive close on Wall Street overnight as US and China formally signed the long awaited phase one deal. Hong Kong’s Hang Seng has gained 0.43 per cent and Japan’s Nikkei 225 has advanced 0.14 per cent, while China’s Shanghai Composite was almost unchanged.  

Back home, on Wednesday, key benchmark indices had a shaky start on the back of weak global cues and selling pressure exaggerated. However, in the second half of the trading sessions, key benchmark indices took a U-turn from lower levels and trimmed majority of losses to finally end the day with modest losses. BSE Sensex lost 0.19 per cent and Nifty dipped 0.15 per cent. Amongst the broader markets, Nifty mid-cap and small-cap continued to outperform frontline indices and they surged 1.04 and 1.05 per cent, respectively. On the sectoral front, Nifty Realty and Nifty Auto were the top gainers. On the flip side, Nifty Private Bank and Nifty Bank were the top losers.  

As for global happenings, the main news item on Wednesday was a highly anticipated ‘phase one’ trade agreement between the world’s two largest economies. The truce hopefully signals the end of the nearly two-year tariff war between Washington and Beijing, which had stirred up doubts over its possible impact on the global economy. The US markets began the session high on optimism and all the three major indices clocked record intraday highs. However, in the late afternoon, rally fizzled out and indexes gave back some of the gains. At the closing bell, the Dow was up by 91 points, the S&P rose 6 points and tech-heavy added 7 points. Markets in Europe ended on a mixed note as the market participant preferred to wait and watch ahead of signing of a phase on trade deal.