Little Hope for Market Buoyancy

The outlook for the day is a flat start with a positive bias and the key catalyst this morning which could boost market participants’ sentiments is the comment from US President Donald Trump that the deal with China could come sooner than expected. At the time of writing, the SGX Nifty was trading up by 20 points at 11,495 levels. However, as the session progresses, we expect volatility to kick in on account of future and option expiry for the September series. 

The markets in Asia edged higher in early deals on Thursday following positive close on Wall Street with hopes of US and China striking a deal soon. Hong Kong’s Hang Seng has gained 0.31 per cent, Japan’s Nikkei 225 added 0.24 per cent, and China’s Shanghai Composite rallied 0.45 per cent.

Back home, it was a sea of red on Dalal Street on Wednesday as key benchmark indices ended the session with sharp losses. The key catalyst triggering this negativity was the concern over US’ political uncertainty and global growth worries that came back to haunt the markets. The 30-share BSE index tanked 504 points to end at 38,594 while, the broader NSE Nifty plunged 148 points to end at 11,440. Banking stocks remained under severe selling pressure for the most part of the day and Bank Nifty lost around 2 per cent. The broader market indices too ended in losses with Nifty Mid-Cap and Small-Cap losing 1.90 and 1.95 per cent, respectively. Barring Nifty IT, all other sectoral indices closed in the red. Nifty PSU Bank and Nifty Auto declined the most. The advance-decline ratio was skewed toward decliners.

The US stock market started off Wednesday’s session on a positive note, helped by Nike which rallied to an all-time high after the sportswear behemoth announced stronger than expected earnings and also since new sales were higher than expected. However, soon the optimism faded and markets turned volatile. But, the markets turned buoyant late in the session after an announcement from President Donald Trump that the US and Japan have reached a preliminary trade agreement and that a deal with China may be closer than anticipated. At the end, the Dow ended the session up 0.61 per cent, the S&P 500 added 0.62 per cent and the tech-heavy Nasdaq Composite surged 1.21 per cent. 

The European equities finished Wednesday’s session in red. Germany’s DAX and France’s CAC 40 declined 0.59 and 0.79 per cent, respectively. UK’s FTSE 100 shed 0.02 per cent.