Markets to kick-off the week on a subdued note amid weak global cues

Taking weak cues from across the globe, we expect Indian stock markets to open on a subdued note and continue with consolidation to correction due to profit-booking before resuming its bounce towards the record levels. We have major macroeconomic numbers of CPI and WPI on the cards, which are expected to be declared on Monday. Some of the major companies to declare results on Monday include Tata Steel, Tata Chemicals, Cadila Healthcare, CARE Ratings, Godrej Industries, DHFL, Oil India, Ashoka Buildcon and Hotel Leela Venture. 

The week has started off on a subdued note for the Asian indices which are trading lower on Monday  as investors were shaken due to sell-off in the Turkish lira. It was yet again Donald Trump who announced doubling of tariffs on imports of metals from Turkey. As a result, yen was up against the dollar. Hong Kong's Hang Seng plunged 1.3 per cent and China’s Shanghai Composite has dropped nearly 1 per cent. Japan’s benchmark Nikkei 225 has dipped 1.2 per cent.  

Back home, equity benchmarks took negative cues from Thursday’s session as the indices took a U-turn after making yet another record high on Thursday. As a result, markets ended on a negative note on Friday, with the NSE Nifty closing below 11450 at 11430 and Sensex too closing below 38000 mark at 37869. The broader market indices underperformed with some more downside with S&P BSE Mid-cap and Small-cap losing 0.8 per cent each. On the Nifty sectoral front, PSU Banks led the move and plunged 3.8 per cent, but IT, FMCG and Auto indices remained marginally up.

The geopolitical tensions have weighed down on the US markets too. The US stocks slipped on Friday ahead of cautiousness amongst investors in the wake of financial instability in Turkey. Turkey’s currency is seen depreciating and the country in itself is in a diplomatic fight with the US. Doubting the country’s ability to deal with the financial problems, the global markets are worried about Turkish issues affecting the global banking system. Nasdaq and S&P 500 closed 0.7 per cent down each while Dow Jones ended 0.8 per cent down. 

European markets too declined with the Turkish news as traders rushed out of banking stocks. The ECB too showed concern about Turkish lira, whereby euro dropped against the dollar. The DAX of Germany dropped 2 per cent; CAC 40 of France closed 1.6 per cent down, while the UK’s FTSE 100 declined 0.98 per cent.