Positive cues from Asian peers may see markets starting in upbeat mood
As we enter the penultimate day of the expiry of derivative contracts for September series, we are likely to see an optimistic opening to the trade as cues from the Asian peers are supportive. The SGX Nifty is trading with gains of 56 points at 10,134, indicating a cheerful start to the day. However, we maintain our cautious stance on the markets as volatility is likely to remain elevated ahead of the expiry of September derivative contracts as also the outcome of the US Fed meeting. We would advise traders and investors to remain selective in stock picking.
Most of the Asian markets are trading in the green in early deals on Wednesday shrugging of tepid close on the Wall Street. The equity benchmark in Hong Kong has gained 0.63 per cent, China’s Shanghai Composite has advanced 0.14 per cent, while Japan’s Nikkei 225 has dipped 0.23 per cent.
Back home, Tuesday turned out to be a delightful day for the bulls as benchmark indices ended their five-day losing streak and reclaimed their crucial levels of 11,050 (Nifty) and 36,600 (BSE Sensex). After starting the day on a flat note, markets witnessed a roller-coaster ride swinging both ways with high volatility. However, smart recovery was seen towards the fag end of the day as statement from LIC Chairman on IL&FS boosted investor sentiments. The broader indices continued to underperform the frontline indices with the Nifty Mid-cap gaining 0.09 per cent, while the Nifty Small-cap losing 1.19 per cent. On the sectoral front, barring Nifty Realty, which lost 1.72 per cent, all other sectoral indices ended in the green with Nifty Pharma gaining the most. The VIX index dropped 4.27 per cent to close at 16.68.
On the Wall Street, trading on Tuesday was largely directionless, with the Dow and S&P 500 trending slightly lower throughout the day, while the tech-heavy Nasdaq bucked the trend and ended in the positive terrain. Traders seemed reluctant to make any significant move ahead of the Fed announcement, which is due on Wednesday. On the other hand, traders shrugged off a report from the Conference Board showing Consumer Confidence jumping to 18-year high in September. The Dow Jones Industrial Average shed 70 points to close at 26,492; the S&P 500 Index dipped 4 points to finish at 2,916, while the Nasdaq Composite Index added 14 points to end at 8,007.
On Tuesday, the European equities ended the session with modest gains. Energy stocks led to the upside as crude oil prices extended a recent rally. Italian markets led the gains in the region following press report that Italy’s coalition government is willing to keep the deficit below 2 per cent of gross domestic product. The DAX of Germany rose 0.19 per cent; the CAC 40 of France advanced 0.05 per cent and UK’s FTSE 100 gained 0.66 per cent.