Markets likely to open gap-down reacting to exit poll outcomes

Indian stocks are likely to witness a gap-down opening as the cues from Asian peers are negative and with the exit polls indicating a strong performance by the Congress in Rajasthan, while BJP and Congress are neck-to-neck in Madhya Pradesh and Chhattisgarh both in terms of vote share and seats as per the exit polls. The markets participants would have preferred a better show by the BJP as it would hint at the continuation of the reforms process. Market participants would be waiting for the actual results due on December 11, but for sure, volatility is likely to be ingrained in the coming sessions. The SGX Nifty Index Future is trading with a deep loss of 148 points, indicating Nifty may open below the 10,600 mark.   
  
On Monday, Asian stock markets sank into a sea of red after Wall Street suffered a setback on Friday, and over the weekend, China reported far weaker-than-expected November exports and imports data. The Japanese stock market Nikkei 225 has plunged 2.24 per cent, Hong Kong’s Hang Seng has slipped 1.58 per cent and China’s Shanghai Composite Index has fallen 0.44 per cent.  
  
Back home, equity benchmarks made a firm start on the last trading day of the week and, thereafter, the benchmarks traded in a narrow range. However, in the last leg of the trading session, benchmarks added gains to end the session near the high of the day. The BSE Sensex surged 1.02 per cent to close at 35,673 and the Nifty gained 0.87 per cent to end at 10,694. The broader indices underperformed the benchmark indices with Nifty Mid-cap and Small-cap registering minuscule gains of 0.02 and 0.06 per cent, respectively. As for sectoral performances, Nifty Private Banks and Nifty Bank were top gainers, while Nifty Metal and Nifty IT were top losers.   

The major US indices had a flat start to the last trading session of the week, but the bears came out with guns blazing and the selling accelerated as the day wore on. The main culprit for the sell-off on the Wall Street was the monthly jobs report which came in softer-than-expected and further, to rub salt in the wounds, were the concerns over trade relations between the US and China. At the end, the Dow Jones Industrial Average dropped 2.24 per cent, the S&P 500 fell 2.33 per cent and the Nasdaq Composite index plunged 3.05 per cent.  
  
A majority of European equities ended Friday’s session in the green, but pared their gains in late trading. The DAX of Germany dipped 0.21 per cent, the CAC of France added 0.68 per cent and the UK’s FTSE 100 rose 1.28 per cent. In action was the stock of healthcare firm Fresenius, which tanked over 16 per cent after the healthcare group slashed its medium term guidance.