Markets may open on a soft note; follow stock-specific approach in todays session

On Wednesday, Indian markets displayed a strong performance as Nifty witnessed a breakout of the consolidation range while the key benchmark indices ended the day at record highs. However, on Thursday morning, SGX Nifty is indicating a soft opening as the global cues are not encouraging. SGX Nifty was trading down by 17 points at 13,668 levels. As long as Nifty trades above the level of 13,550-13,600, dips could be bought.  

The broader markets outperformed the frontline indices in the last trading session and we expect the broader indices to continue their outperformance and hence, it would be prudent to adopt a stock-specific approach.

Profit booking was evident in most of the Asian Indices on Thursday. China’s Shanghai Composite was down by 0.20 per cent while Japan’s Nikkei 225 and Hong Kong’s Hang Seng were trading with meager losses.

US stocks ended on a mixed note on Wednesday with the tech-heavy Nasdaq ending at a record high and S&P 500 closing above the 3,700 mark. Meanwhile, Dow dropped 0.2 per cent. It was a busy day on Wall Street as a host of economic data along with the Federal Open Market Committee (FOMC) decision, was announced. US Fed left its monetary policy stance unchanged; the policymakers indicated that the US $120 billion in monthly purchases will continue until ‘substantial further progress’ is made towards the Committee’s maximum employment and price stability goal.   

Under economic news, retails sales declined at a steeper pace in November while National Association of Home Builders report showed homebuilder sentiment declined more-than-expected in December. In the European region, stocks ended mostly higher on the back of encouraging economic data and the likelihood of a Brexit deal before the end of 2020.