Markets likely to drop further following weak global cues

After a fierce sell-off in the last trading session, Indian markets are likely to extend their downmove at the opening bell following weak cues from the global markets. At the time of writing, SGX Nifty was trading down by 14 points at the 11,554 level. With the beginning of the earnings season, market participants will closely monitor the results of IT bellwether TCS due today. The earnings season will play a crucial role as it would be interesting to see whether it helps to improve the market sentiments or deteriorate it further.  

The Asian markets are mostly weak on Tuesday following negative cues from the Wall Street in overnight session. The Japanese stock index Nikkei 225 is up by 0.25 per cent, while Hong Kong’s Hang Seng is down by 0.44 per cent and China’s Shanghai Composite has slipped by 0.09 per cent.  

Back home, bears were seen calling the shots on D-Street as the key benchmark indices plunged over 2 per cent on Monday. The weak global cues and reaction to certain provisions of the Union budget weighed heavily on the Sensex and Nifty. The selling pressure was more intense in the broader market indices with Nifty Midcap and Smallcap plummeting 2.70 per cent and 2.36 per cent, respectively. Also, selling was visible across all sectors, with maximum pain seen in Nifty PSU Bank as it tumbled over 5 per cent followed by Nifty Realty, Nifty Auto and Nifty Media.

The US equities opened the session lower and remained under pressure throughout the day on Monday. At the end of the day, the Dow Jones Industrial Average declined 116 points, the tech-heavy Nasdaq Composite dropped 63 points and the S&P 500 slipped 14 points.

European stock markets ended Monday’s session with modest losses as Eurozone investor confidence unexpectedly continued to slide in July to its lower level since November 2014. Germany’s DAX dipped 0.2 per cent, France’s CAC 40 shed 0.08 per cent and UK’s FTSE 100 ended lower by 0.05 per cent.