Markets likely to witness flat start amid signs of exhaustion

The Indian markets may see a flat start on Thursday as indicated by the Nifty future traded on the Singapore Exchange known as SGX Nifty. At the time of writing, the SGX Nifty was trading 7 points higher at 11,391. After the back-to-back centuries by the Nifty on Monday and Tuesday, the index on Wednesday extended its upmove. But the index signaled some signs of exhaustion as the market breadth was not favourable. Hence, we would advise short term traders to let the market take a breather and relieve itself from the overbought zone. Market participants may take cues from the economic data as well, i.e. the Wholesale Price Inflation to be released today.

Majority of the Asian stocks are trading in the green on Thursday following strong leads from the US markets. The Japanese stock market Nikkei has edged up 0.66 per cent and Hong Kong’s Hang Seng index was up by 0.29 per cent, while China’s Shanghai Composite index has dipped 0.16 per cent.

Back home, key benchmark indices extended their northward journey for the third straight day on Wednesday. Indices started the session with gains and, thereafter, they remained confined in a range for a major part of the session. In the second half of the session, the bulls staged a smart recovery and ended the day with gains. Nifty rose 0.36 per cent and BSE Sensex added 0.58 per cent. The broader market indices underperformed the benchmark indices, with Nifty Midcap and Smallcap closing lower by 0.55 per cent and 0.21 per cent, respectively. The sectoral indices displayed a mixed trend. Banking and Realty indices ended with robust gains, while on the flip side, Nifty Media, Metal and Pharma ended as top losers. 

The US stocks closed firmly in the positive territory on Wednesday amid better-than-expected read on durable goods orders and wholesale price inflation coming in cooler than expected. The Dow gained 0.6 per cent, the Nasdaq rose 0.7 per cent and the S&P advanced 0.7 per cent.

European equities ended in the green on Wednesday as the energy sector advanced on the back of the rise in the crude oil prices. On the economic front, the Eurozone industrial production grew in January after declining in the previous two months. The DAX of Germany rose 0.42 per cent and the CAC 40 climbed 0.69 per cent and the FTSE 100 of the UK ended with gain of 0.11 per cent.