Unhappy start for market, hoping for a happy end to 2019
As market participants enter the final trading session of the CY 2019, the markets have to deal with global weakness, which is sure to spill on to the Indian shores as well. SGX Nifty, which is currently trading almost 42 points below its yesterdays close, is already reflecting it. If we look back at CY19, investors will remember it as the one, where they saw it all. Benchmark indices sailed through the storms of sluggish economic growth, disappointing corporate earnings, and the global trade war, as these indices registered fresh all-time highs on hopes that the government has swung into action and more measures like corporate tax cuts will come through to revive the animal spirits. Despite the frontline indices scaling to new records highs, market participants were not too pleased with Mr. Market in CY19. It was mostly due to a divergent tale, as the performance between the frontline indices and the broader markets were not on the same page. Nifty, up by about 13 per cent in CY19, posted its second-best performance in the last five calendar years. Meanwhile, Nifty Midcap and Smallcap, which were down by 4.5 and 10 per cent, respectively, gave a negative return for the second year in a row. However, going into the new calendar year, participants will wish the buoyancy to continue in the markets and, at the same time, hope that the rally in CY2020 should be broad-based. They will also keep an eye on the Infrastructure output for November, which is due today.
No clear direction is visible in the Asian markets on Tuesday. Hong Kong’s Hang Seng is down by 0.56 per cent and China’s Shanghai Composite is flat.
Back home, it was a volatile day of the Indian markets on Monday. After opening the session on a buoyant note, the markets gave up their gains and slipped in the negative terrain. However, in the second half of the trading sessions, the markets recovered from lower levels. In the end, Nifty ended in green with minuscule gains and BSE Sensex closed in red with modest losses. Broader markets outperformed the major index, with Nifty Midcap and Small-cap closing higher by 0.37 and 0.61 per cent, respectively. On the sectoral front, Nifty Auto and Nifty Metal were top advancers while Nifty PSU Bank declined the most.
What is intriguing today is the way global markets behaved yesterday. A correction has been witnessed in the US markets. You can call it cooling off after a big run. The market had a tough time from the outset this morning and remained under pressure for the balance of the session. On the economic front, Chicago manufacturing activity improved more than expected but remained at a level depicting contraction for a fourth-straight month. At the closing bell, Dow fell 183 points, the S&P 500 slipped 19 points and NASDAQ Composite declined 61 points. The European benchmarks too have followed their US counterparts and finished lower.