Markets may open on a flat note

This morning, the biggest headlines is that the retail inflation jumped 4.62 per cent in October, breaching the RBI target of 4 per cent for the first time in 14 months on higher food prices. This latest retail inflation data may not go down well with market participants as it reduces the headroom for a rate cut by the RBI at its monetary policy meet due in December. However, in early deals, the SGX Nifty is indicating a positive opening as it trades with gains of 23 points at 11,888 mark. Going ahead, market participants will set their eye on the 11,800 mark, with it being the make or break level for the Nifty index. A close below 11,800 mark would open doors for a further correction while holding above 11,800 would be a ray of hope for the bulls. Today Vedanta, NBCC, Apollo Hospital, Bharti Airtel, ONGC, Grasim and IDFC will present their corporate earnings reports. Apart from corporate earnings, traders will keep a close watch on rupee’s trajectory against the US dollar after the domestic currency fell over two month low and crossed 72 mark against the US dollar in the last session.

The Asian markets lack a clear direction on Thursday. Hong Kong’s Hang Seng and Japan’s Nikkei 225 are trading down by 0.46 and 0.16 per cent, respectively, while China’s Shanghai Composite was seen advancing.

Back home, the equity benchmarks, Sensex and Nifty, ended the session with losses of over half a per cent on Wednesday. The BSE Sensex lost 0.57 per cent to end at 40,116 and the Nifty slipped 0.61 per cent to end below 11,850 mark. The sentiment was affected due to weak domestic economic data and frail global cues. The selling pressure was intense in the broader market indices, with Nifty Midcap and Smallcap being down by 0.8 and 1.5 per cent, respectively. On the sectoral front, all sectoral indices ended in the red, with Nifty Media, Nifty PSU Bank, and Nifty Metal losing the most. The advance-decline ratio was leaned toward decliners.

In overnight developments, the US markets moved back and forth across the neutral line before ending the session mixed to positive. The Dow and the S&P 500 ended the session at new record closing highs. Initially, sentiments turned sour as reports regarding talks, surrounding a potential ‘phase one’ agreement between the US and China, hitting a snag over agriculture purchases began to emerge. However, the selling pressure faded as Fed Chairman, Jerome Powell, reiterated in Congressional testimony that the central bank is likely to leave interest rates unchanged in the near future. In economic news, the CPI climbed 0.4 per cent in October, which was in line with the expectations. Meanwhile, the European indices ended lower on Wednesday amid renewed uncertainty about a potential US and China trade deal and concerns over the political unrest in Hong Kong.