Markets may open with a gap-down following weak global cues

Indian stocks are likely to witness a gap-down opening following weakness seen across Asian markets and as the US equity futures pointed to substantial fall on the Wall street. The US political uncertainty added to heightened concerns over the slowing global economy. The SGX Nifty Index Future has declined 62 points from Monday’s close, indicating Nifty may open around the 10620 level. 

Asian stocks opened with mixed cues after the plunge on Wall Street on the Christmas eve. The Japanese stock market Nikkei 225 has surged 0.45 per cent, while China’s Shanghai Composite Index has fallen 0.09 per cent. Hong Kong’s market is closed on Wednesday due to the Christmas Day. 

Back home, equity benchmarks began with modest gains despite the depressing cues from the global peers. Thereafter, the benchmarks traded most of the time in a range with a negative bias. However, several attempts were made for a recovery, but in the second-half of the trading session, strong selling emerged and eventually the index closed near the lowest point of the day. The BSE closed below the 35,500 mark and Nifty ended below the 10,700 mark. The broader indices too performed dismally in line with the benchmark indices as Nifty Mid-cap and Small-cap plunged 0.66 and 1.06 per cent, respectively. On the sectoral front, barring Nifty PSU Bank and Nifty IT, all other indices ended in the red with Nifty Metal and Nifty Realty declining the most.   

The US stocks ended sharply lower on Christmas eve pressured by negative factors, including heightened concerns over the partial US government shutdown and tension between the US president Donald Trump and the Federal Reserve. Fears of a US and global economic slowdown have sent the US 10-year yields tumbling by around 25 basis points in December. On Monday, the Dow Jones Industrial Average tumbled 2.91 per cent, the tech-heavy Nasdaq plummeted 2.21 per cent and the S&P 500 lost 2.71 per cent. 

Some of the European equity markets were closed early on Monday due to the Christmas eve. The CAC of France dropped 1.45 per cent, the UK’s FTSE 100 lost 0.52 per cent, while Germany's market was closed on Monday due to the Christmas eve.