Markets may begin on a negative note due to weak global cues

The Indian markets are expected to have a negative opening today due to persistent weak global cues. Nifty 50 index future on the Singapore stock exchange is currently trading down by 23 points at 10,709. The economic data to watch today is the Nikkei India Services PMI for June.  

Asian shares were under pressure in early trading on Wednesday after the US markets swung wildly and reversed gains to close lower. Japan’s Nikkei 225 index has shed 0.75%, Hong Kong’s Hang Seng has dropped 0.63% and China’s Shanghai Composite has slid 0.58%. The concerns of market participants over trade have intensified as tariffs on billions of dollars worth of US and Chinese goods are set to take effect later this week.  

Back home, after the initial bumpy ride, key indices bounced back and ended the Tuesday’s session in the green with frontline indices ending just shy of their important psychological levels of 10,700 (Nifty) and 35,400 (Sensex). The broader markets outperformed the benchmark indices with the Nifty Mid-cap and Small-cap indices gaining 0.92% and 0.70%, respectively. On the sectoral front, Nifty Pharma, Nifty IT and Nifty Auto were the top performing indices. On the flip side, stocks from Nifty PSU Bank and Nifty Metal dragged the market.  

The US stocks gave up all their early gains and ended Tuesday’s session in the red. The pullback on Wall Street was on the back of the move from President Donald Trump’s administration recommending blocking of China Mobile from offering telecommunication services within the US and this move could further inflame trade tensions between the US and China. Meanwhile, on the US economic front, the US commerce department released a report showing an unanticipated rebound in new order for manufactured goods in May. The Dow Jones Industrial Average slipped 132 points to close at 24,175, the S&P 500 dropped 13 points to finish at 2,713 and Nasdaq fell 65 points to end at 7,503. The US financial markets will be closed in observance of the Independence Day holiday on Wednesday.  

The European markets ended Tuesday’s session firmly in the green. The sentiments remained upbeat after German Chancellor Angela Merkel and her coalition partners reached a compromise deal to end a difference over managing immigration. The DAX of Germany rallied 0.91%, the CAC 40 of France gained 0.76% and the UK’s FTSE 100 ended higher by 0.60%.