Monday blues for equity markets

After a ferocious Friday, the markets witnessed selling pressure in the last hour of trade, resulting in the markets to close on a flat note. On Friday, FPIs pushed the sell button for the second straight day in a row for the first time this month as they were the net sellers to the tune of Rs. 1,008 crores and combined selling for the last two days stand at Rs. 1,570 crores. The new week begins with hopes of a likely phase one deal between the world’s two largest economies - the US and China. However, the overhang of telecom companies, which have reported combined losses of more than Rs. 1 lakh crores, and their huge debt are major concerns for market participants. The Telecoms have written off the AGR charges against their Q2 revenues but it leaves a big hole to fill and, due to this, the markets are expected to witness a dull opening. At the time of writing this, the SGX Nifty was trading with losses of three points at 11,941 levels. 
 
The Asian markets were trading with a positive bias on Monday, following a record closing high on Wall Street on Friday. Hong Kong’s Hang Seng jumped 1.19 per cent and Japan’s Nikkei 225 and China’s Shanghai Composite advanced 0.30 and 0.28 per cent, respectively.
 
Back home, the key equity barometers started off the session on a buoyant note. As the day progressed, the bulls extended their gains. However, in the second half of the trading session, the markets witnessed a sharp reversal in sentiments and ended the session with modest gains. The Nifty added 0.20 per cent to end at 11,895 and the BSE Sensex rose 0.17 per cent to 40,357 levels. The broader markets ended on a mixed note, with Nifty Midcap closing up by 0.31 per cent and the Nifty Smallcap slipping 0.18 per cent. The mixed trend was witnessed on the sectoral front as well, where Nifty PSUBank, Nifty Pharma and Nifty Bank were the top gainers and Nifty IT, Nifty FMCG and Nifty Auto emerged as top losers.
 
As far as developments in the west are concerned, the US markets looked past the mixed retail sales and fall in industrial production reports as upbeat comments from White House economic adviser, Larry Kudlow, regarding the progress towards a ‘phase one’ US-China trade deal became music to bulls' ears and all the major reached new record highs on Friday. The Dow surged 223 points to close above the psychological 28,000 mark, the NASDAQ jumped 62 points and the S&P 500 advanced 24 points. In the European region, the mood was cheerful. The German DAX ended the session up by 0.4 per cent, France’s CAC 40 index climbed 0.7 per cent, and the UK’s FTSE 100 moved higher by 0.2 per cent.