Markets may begin flat despite positive global cues

On Wednesday morning, the domestic markets have both the good as well as bad news to deal with. Since not much good news was seen by the markets in recent times, let us talk about the good news first. A report indicated that the US officials will soon travel to China for a face-to-face trade talks. On the other hand, the bad news is that the IMF has lowered India’s growth projection to 7 per cent in 2019 citing weak demand.

The outlook for the day is a flat start as the SGX Nifty was trading higher by 5 points at 11,330 level. For the Nifty, the crucial support level is 11,300 and it is the last hope for the bulls for any rebound. There would be confirmation of strength only above the 11,400 mark. Asian Paints, Canara Bank, Jubilant Food, Shriram Transport Finance and Vguard are some of the prominent names to report their earnings today.

Mirroring the Wall Street, Asian markets were trading positive on Wednesday morning. The Japanese stock index Nikkei 225 has added 0.54 per cent, China’s Shanghai Composite index has surged 1.06 per cent and Hong Kong’s Hang Seng has gained 0.95 per cent.

Back home, the key equity benchmark indices enjoyed a modestly positive start but, thereafter, volatility was evident all through the session. However, in the last leg of trading, the indices came off sharply from the highs and extended their southward movement for the fourth straight session. Nifty and BSE Sensex dipped 0.13 per cent, while Nifty Midcap ended with a loss of 0.57 per cent, whereas Nifty Smallcap advanced 0.47 per cent. Amongst the sectoral indices, Nifty Realty, Nifty FMCG and Nifty IT were top gainers, while Nifty PSU Bank and Nifty Financial Services were top losers.

The US stock markets rallied on Tuesday shrugging off softer-than-expected existing homes sales along with a lowered growth forecast from the IMF. The news report that the Trump’s trade team is heading to China for face-to-face talks next week helped sentiments to rise about the likelihood of an eventual deal. In the end, the Dow jumped 177 points, the S&P 500 advanced 20 points and the tech-heavy Nasdaq climbed 47 points.  

The European indices ended Tuesday session on a positive note on the back of some upbeat earnings and monetary easing hopes. In the UK, Boris Johnson was chosen as the UK’s next prime minister. Johnson at the helm meant that he will have just over three months to make good on his promise to lead the UK out of the European Union by October 31. Germany’s DAX rose 1.64 per cent, France’s CAC 40 and UK’s FTSE 100 moved higher by 0.92 per cent and 0.56 per cent, respectively.