Muted start likely to the new financial year

The benchmark indices are likely to make a soft start as global cues are flat to positive. The trading may be a little choppy after a string of bank holidays in India and Easter Monday holiday in the UK, Australia and most parts of the Europe. It would be important to see whether the Nifty is able to sustain above its 200-day SMA, which stands at 10,178.  The SGX Nifty is pointing that the Nifty may open around 10,222. 

Indian equity markets were on a roll for most of the financial year 2017-18, aided by strong domestic liquidity and favourable macroeconomic conditions. In fact, the ride till January this year was smooth, but the rally started to lose its sheen soon after the Budget as the surprise announcement of tax on Long Term Capital Gains (LTCG) and the detection of frauds in public sector banks and trade war fears between the US and China and other countries. The Nifty index gained about 11% in FY17-18 and the BSE Sensex rose about 12%. 

The stock markets in Asia are trading in the green terrain on Monday after a positive close on the Wall Street. Japan’s benchmark index Nikkei 225 has gained 0.53%, Hong Kong’s Hang Seng has added 0.24% and China’s Shanghai Composite has risen 0.73%. Weeks after President Trump imposed tariffs on Chinese steel and aluminium imports, China is striking back. China’s Custom Tariffs Commission announced tariffs on 128 American products that will take effect beginning April 2. 

Back home, on the eve of March Series expiry and the last trading day of the financial year, the frontline indices Nifty lost 70 points to close at 10,113 and BSE Sensex ended down by 206 points at 32,969. In line with benchmark indices, the broader indices too slipped lower as Nifty Mid-cap and Small-cap slumped 1.07% and 0.97%, respectively. All the sectoral indices on NSE ended in the red, with Nifty Metal and Nifty PSU Banks leading with losses of 2.04% and 1.93%, respectively. 

All the three major US stock indices gained more than 1% on Thursday in a broad rally that had nearly every sector participate in the gains. The Dow Jones Industrial Average posted a quarterly decline, halting a record-setting streak of nine quarterly gains. The Dow Jones Industrial Average rose 255 points to close at 24,103, the Nasdaq Composite Index surged 114 points to finish at 7,063 and the S&P 500 Index added 36 points to end at 2,641. On Friday, major US markets remained closed on account of Good Friday. 

On the last trading day of the quarter, the European markets edged higher on Thursday, ahead of the Easter holiday weekend. The auto stocks were the top gainers led by Renault. Renault surged about 6 per cent following a media report that the company could merge with Nissan. Germany’s DAX index rose 1.31%, France’s CAC 40 index climbed 0.72% and UK's FTSE 100 finished higher by 0.17%. Majority of European markets will remain shut on Monday for Easter Monday.