Markets up for flat to negative start

The day is likely to start at a flat to negative note for the domestic markets. At the beginning of the day, there could be jitters among market participants on waning prospects of a deal between the world’s two largest economies, that is, the US and China, after the US President Donald Trump signed legislation that expresses the US support for Hong Kong protesters. However, we believe investors should look to buy the dip as the 12,000 mark is very good support on the Nifty and, as long as we stay above this level, we can look to buy the dip. Nevertheless, do not expect it to be a cakewalk for bulls as the expiry of the November series of F&O is expected to keep markets volatile. At the time of writing this piece, the SGX Nifty was trading almost down by 18 points at 12,107.
 
On the Asian side, the markets are trading mixed this morning as market participants turned cautious after the US President Donald Trump has signed the law legislation backing pro-democracy protesters in Hong Kong, despite angry objection from Beijing. This move by the US President Donald Trump threatens to complicate trade talks with Beijing just as the two nations get close to signing the phase one deal. Nikkei 225 is currently up by 0.05 per cent while Hong Kong’s Hang Seng and China’s Shanghai Composite were down by 0.08 and 0.19 per cent, respectively.
 
Back home, the markets opened the session on an optimistic note and settled with decent gains amid volatility. The BSE Sensex settled above the important psychological level of 41,000 and the Nifty closed above 12,100 mark. In the broader market, Nifty Midcap and Smallcap gained 0.76 and 0.04 per cent, respectively. Among the sectoral indices, Nifty PSU Bank gained the most and was followed by Nifty Auto and Nifty Metal. On the flipside, Nifty Realty and Nifty Media ended in the red territory.
 
As for global happenings, on Wall Street, the three major indices closed at a record high on Wednesday. Good earnings results, coupled with some constructive economic data, bolstered the bulls. At the end of the session, the Dow rose 42 points, the S&P 500 gained 13 points and the NASDAQ jumped 57 points. Meanwhile, in Europe, major indices finished mostly higher, with Germany’s DAX advancing 51 points and London’s FTSE surging 27 points while France’s CAC 40 dipped 3 points.