Markets may open in the red following negative global cues

The month of July was a nightmare for the Indian markets as the markets recorded their worst July performance in 17 years. If we analyse the early trends in the SGX Nifty, there are no signs of revival as the SGX Nifty indicates a negative opening for the markets and the bears are likely to dominate the first trading session of the month of August. Global cues are also not helping the cause painted as they are in the red as Fed Chairman Powell poured cold water on expectations of a lengthy easing cycle. At the time of writing, the SGX Nifty was trading with a cut of 48 points at 11,073. Prominent names to announce earning today are Bharti Airtel, Tata Power, Marico and Godrej Consumer Products. Auto stocks will be in action today as July auto sales numbers will start trickling in today.

A majority of the Asian markets were trading in the red on Thursday following a disappointing session on the Wall Street overnight despite a rate cut announced by the US Fed for the first time in more than a decade. However, the comments from Fed Chairman Jerome Powell that the rate cut has been in the pipeline for a while and does not necessarily mean a long cycle of rate cuts hampered sentiments. The Japanese stock index Nikkei 225 is almost unchanged, Hong Kong’s Hang Seng and China’s Shanghai Composite index have slipped 0.53 per cent and 0.36 per cent, respectively.

Back home, finally a green day for the markets as the key equity benchmark indices halted their slump. On Wednesday, the markets opened lower and traded in the negative terrain for a major part of the trading session. However, in the second half of the trading session, the markets reversed their losses to end the day on a positive note. The Nifty ended up by 0.29 per cent at 11,118 and the BSE Sensex gained 0.22 per cent to close at 37,481. The broader market indices outperformed the frontline gauges with Nifty Midcap and Smallcap jumping 1.38 per cent and 0.41 per cent, respectively. Talking about the sectoral performance, major sectoral indices ended in the green with Nifty Metal, Nifty PSU Bank and Nifty Pharma being top gainers, while Nifty Media, Nifty Realty and Nifty Financial Service being the losers. 

Much on the expected lines, Powell announced the first interest rate cut of 25 basis point in over a decade to support the domestic economy in a more difficult global environment. However, the comments from Chairman Powell about not having a pre-set path of future rate cuts sent shivers down the spine and the markets started correcting. Meanwhile, on the economic front, ADP employment change report showed that 156,000 private jobs were added in the economy in July. In the end, the Dow and tech-heavy Nasdaq plunged 1.2 per cent each and the S&P 500 dropped 1.1 per cent.

The European indices ended Wednesday’s session on a mixed note. Germany’s DAX and France’s CAC 40 added 0.34 per cent and 0.14 per cent, while UK’s FTSE 100 declined 0.78 per cent.