Markets may begin on a shaky note tracking negative global cues

The outlook for the day is a shaky start as the landscape of global indices has turned red after the release of a slew of dismal economic data and an inverted yield curve in the US bonds created concerns of a global economic slowdown. At the time of writing, the SGX Nifty was trading at 11,418, down by 51 points.

Shaken by concerns about the prospects of the global economy and a sharp sell-off on Wall Street on Friday, Asian markets kicked off the new week in a sea of red. The Japanese stock market Nikkei has lost 3.22 per cent, Hong Kong’s Hang Seng index has shed 1.52 per cent and China’s Shanghai Composite index has lost 1.03 per cent.  

Back home, the frontline indices witnessed profit-booking on the final trading session of the week and settled the day with modest losses. The Nifty slipped below 11,500 mark, down by 0.56 per cent, and the BSE Sensex ended lower by 0.58 per cent at 38,165. The broader indices ended the day in the red as well, with Nifty Midcap and Smallcap losing 0.59 per cent and 0.75 per cent, respectively. Talking about the sectoral performance, barring Nifty Realty, all other sectoral indices ended in the negative terrain, with Nifty PSU Bank and Nifty Media leading the fall.

The US markets witnessed a dramatic end to the week as stocks plunged on the back of weak manufacturing reports in the US, stirring fresh fears about the global economy. Further, the catalyst for the sell-off, which economists say if it persists, is often the popular indicator of an impending recession, that is the inverted yield curve of the US bonds, which means that yields on short-dated three-month bills are greater than those on 10-year treasury bonds. The Dow Jones Industrial Average lost 1.77 per cent, the tech-heavy Nasdaq Composite index plunged 2.50 per cent and S&P 500 index dropped 1.90 per cent.  

The stocks nosedived in the European region on Friday as investors reacted to somber news about the global economy. A host of weakening economic data, along with a subdued global outlook from the Fed earlier in the week, weakened the sentiments. The DAX of Germany sank 1.61 per cent, the CAC 40 plummeted 2.03 per cent and the UK’s FTSE 100 fell 2.01 per cent.