Markets likely to begin on a subdued note

The outlook is a flat start and indices could remain subdued initially. In the early action, SGX Nifty was trading lower by 18 points at the 11,865 level. Nifty’s make or break support for today’s trade is at 11,800.  

A majority of the markets in Asia were trading in the positive terrain on the last trading session of the week following a positive close on the Wall Street. The Japanese stock index Nikkei 225 has advanced 0.41 per cent and in Australia, the ASX 200 gained 0.44 per cent. The stock markets in China and Hong Kong are closed for a holiday.

Back home, Thursday turned out to be a terrible session for the key benchmark indices as both BSE Sensex and Nifty closed with steep losses of over a per cent each. This despite the Reserve Bank of India cutting the repo rate by 25 bps and changing its policy stance to ‘accommodative’ from ‘neutral’. The rate cut was pretty much on the expected lines; however, the fall could be due to RBI's silence on addressing the liquidity stress in the NBFC space. The BSE Sensex dropped 1.38 per cent and Nifty slumped 1.48 per cent, respectively. The broader indices underperformed the frontline gauges with Nifty Midcap and Smallcap plunging 1.65 per cent and 1.86 per cent, respectively. All the sectoral indices witnessed selling pressure, with Nifty PSU Bank, Nifty Bank and Nifty Private Bank being the top losers. 

After two days of strong bullish action, the US stocks extended their northward movement on Thursday and registered third consecutive day of gain. The bullish momentum on the Wall Street was seen following a Bloomberg report that the US is weighing delaying tariffs on Mexico, which are set to be in place on Monday. The Dow Jones Industrial Average surged by 0.7 per cent, the Nasdaq composite rose 0.5 per cent and the S&P 500 Index climbed 0.6 per cent.

European markets gave up early gains and ended the Thursday’s session on a mixed note. The ECB left its key interest rate unchanged and now expects interest rates to remain at the present level longer. Also, the ECB slightly upgraded its outlook for 2019 for growth and inflation, but trimmed the same for 2020. Germany’s benchmark DAX and France’s CAC 40 slipped 0.23 per cent and 0.26 per cent, respectively, while UK’s FTSE 100 added 0.55 per cent.