Lower opening in store for the markets

Today, the activity on the D-Street would resume after a day’s holiday and the early indication from the SGX Nifty suggests that the markets are in for a weak start. There are not one, but multiple factors, which are dampening the sentiments of D-Street. To begin with, the industrial production contracted 4.3 per cent in September, the sharpest decline since October 2011, which is reflected on the markets’ today’ start. Moreover, the cut in India’s GDP forecast for FY20 by the State Bank of India’s economic research team to 5 per cent from the earlier estimation of 6.1 per cent and the imposing of President’s rule in Maharashtra are also adding to the markets’ woes. Here, the big question arises that if the dip would be bought, as seen in the previous sessions, or it would let the bears put their foot in the door, resulting into a temporary top for the markets. All in all, we are in for an interesting day; however, volatility will be the buzzword in today’s sessions. At the time of writing, the SGX Nifty was trading 35 points lower at 11,909 levels. Meanwhile, commanding attentions in today’s trade would be the Q2 earnings as the prominent names, which are schedule to announce their earnings today, are BHEL, Bata, IRCTC and Spice Jet.

The Asian markets nosedived in the early trading on Wednesday on the back of lackluster cues from the Wall Street overnight, as a speech and subsequent Q&A session with the President Donald Trump, with which the market participants hoped to gain some insights on trade progress, fell short of those expectations. Furthermore, Hong Kong’s protests continued for the third straight day. Hong Kong’s Hang Seng is the worst hit and has plunged 1.84 per cent, followed by Japan’s Nikkei 225 and China’s Shanghai Composite, which were trading down by 0.91 and 0.46 per cent, respectively.

Back home, the key benchmark indices eked out modest gain on Monday, with the BSE Sensex and the Nifty adding 0.05 and 0.04 per cent, respectively. The key benchmark indices hovered in negative terrain for the most part of the trading session; however, buying interest in the eleventh hour helped indices to end the session in green with main support by banking stocks. In the broader markets, divergent trend was seen, with the Nifty Midcap surging 0.59 per cent while the Nifty Smallcap lost 0.01 per cent. On the sectoral front, Nifty Media surged the most due to the contribution from its major component, that is, Zee Entertainment, which surged as much as 6 per cent. Nifty Private Bank and Nifty Bank also gained over 1 per cent while, on the flipside, Nifty IT and Nifty FMCG declined the most.

In overnight developments, the US equity markets pressed ahead earlier in the session on the back of reports that the US may delay a decision on auto tariffs on Europe and continue optimism of the ‘phase one’ US and China trade deal. However, the markets gradually retreated as the day unfolded as the US President Donald Trump failed to provide details about the state of trade talks between the US and China at Economic Club of New York. All said and done, the Dow was unchanged, the S&P 500 Index was ahead five points, and the NASDAQ surged 22 points at the end. The tech-heavy NASDAQ ended the day at a new record-closing high. The European stocks finished higher on Tuesday and the key catalyst, driving the sentiment was that the US might delay imposition of tariffs on the region’s auto sector.