Positive news flow may see markets opening in the green
Today is Friday, the 13th, considered as an unlucky day. Will the day live up to its reputation of being unlucky for the bulls? Let’s deep dive and look at the important factors in today’s session which may dictate the movement of the Indian stock markets. For starters, the rate of industrial production, as reflected by the IIP, accelerated to 4.3 per cent in July and retail inflation quickened to 3.21 per cent in August, thereby remaining within the central bank’s comfort zone. The reading on these two key economic data points to another round of rate cut by the RBI in its upcoming monetary policy. Further, the global cues this morning are favouring the bulls amid the backdrop of further easing of the US and China trade tensions and ECB delivering further stimulus measures. At the time of writing, the SGX Nifty was up by 6 points trading at the 10,997 level. Despite all the positive news flow, the omen of bearish engulfing formed in the previous session on minor swing high and Friday the 13th will haunt the stock markets.
Asian markets were buoyant in early trades on Friday as market participants digested a series of information overnight from the US-China interim trade deal reports as well as the ECB announcing further stimulus. The Japanese stock index Nikkei 225 is up by 0.88 per cent, China’s Shanghai Composite has gained 0.75 per cent and Hong Kong’s Hang Seng has added 0.08 per cent.
Back home on Thursday, the key benchmark indices failed to hold on to early gains and ended the day with a cut of about half a per cent. Nifty settled below the 11,000 mark and BSE Sensex closed at the 37,104 mark. Divergent trend was seen in the broader market indices, with Nifty Midcap dropping 0.38 per cent, while Nifty Smallcap adding 0.31 per cent. Sectorally, the top gainers were the Nifty Financial Service, Nifty PSU Bank and Nifty Pharma. The top losers were Nifty Auto, Nifty FMCG, Nifty Realty and Nifty IT.
The US markets ended Thursday’s session in the green, but pared earlier gains into the close amid mixed signals about a possible interim trade deal with China. The Dow ended up 0.17 per cent, S&P rose 0.29 per cent and the tech-heavy Nasdaq added 0.30 per cent.
The European stocks ended Thursday’s session in the positive terrain as the European Central Bank delivered further stimulus measures as was highly expected to try to stoke inflation and boost slowing economic activity. The ECB lowered its main deposit rate by 10 bps and announcing a massive new bond-buying programme. Germany’s DAX and France’s CAC 40 advanced 0.41 per cent and 0.44 per cent and the UK’s FTSE 100 closed higher by 0.09 per cent.