Gap-down opening likely following sell-off in US markets

Indian stock markets are likely to open with a big gap on the downside following sell-off seen in the US markets overnight and pessimism across the Asian markets. The SGX Nifty is trading lower by 2.53 per cent at 10,221 level, indicating a dreadful start to the day. On the earnings front, TCS would announce its quarterly results today.  
  
Asian shares were a sea of red on Thursday after the crash in US equities as treasury yields hit 7-year highs, signalling rising interest rates and likely worries for companies that borrowed extensively when money was low-cost, only to face steep repayments in a higher rate environment. The Japanese market Nikkei 225 index has lost over 4 per cent, Hong Kong’s Hang Seng has plunged 3.31 per cent and China’s Shanghai Composite has plummeted 2.95 per cent.  
  
Back home, Wednesday turned out be a wonderful day of trading as the key benchmark indices ended on a firm note, with both Nifty and BSE Sensex registering gains of about 1.5 per cent each. The Nifty reclaimed 10,450 mark and BSE Sensex closed above 34,700. The broader market indices Nifty Mid-cap and Small-cap outperformed the benchmark, registering healthy gains of 4.14 and 4.05 per cent, respectively. Among sectoral indices, barring Nifty IT which closed in the red, all the other sectoral indices ended in the positive terrain with Nifty PSU Bank, Nifty Media and Nifty Realty being the top gainers.  
  
The US stock markets had the worst day on Wednesday since February, with major indices losing more than three per cent in a sell-off prompted by the sudden jump in the US interest rates and increasing trade worries. At the closing bell, the Dow Jones Industrial Average plunged 830 points, the S&P 500 slumped 95 points and the Nasdaq Composite index tumbled 316 points.  
  
European equities finished lower on Wednesday as sell-off on Wall Street intensified. The DAX of Germany dropped 2.21 per cent, the CAC of France lost 2.11 per cent and the UK’s FTSE 100 declined 1.27 per cent. In economic news, UK and French industrial and manufacturing production results came in mixed and the UK trade merchandise trade deficit widened in August and UK GDP growth remained unchanged.