Pre Session- Gloom may return at D-Street on renewed global sell-off
10/09/2015
Indian equity benchmarks are poised to snap a two-day winning streak as global markets bite the dust after stronger than expected US labour market data bolstered the case for the US Federal Reserve to begin tightening interest rates for the first time since 2006, souring the lure for risky assets. Job openings in the US soared to a record in July, putting the Fed’s two-day policy meet on September 16-17 in focus as the world’s top central bank prepares to exit the era of near zero interest rates in the US, keeping traders jittery. Against the backdrop of a bearish trend in markets across Asia and a steep sell-off at Wall Street overnight, coupled with weakness in the SGX CNX Nifty Index futures for September delivery which plunged by 1.16 per cent or 90 points at 7,732 at 10:26 am Singapore time, Dalal Street is set to witness a gap down opening today. Marking a two-day run of gains, the 30-share Sensex on Wednesday rallied 401.71 points or by 1.59 per cent to end at 25,719.58 as global markets rose on hopes that China may be able to maintain stability in the country’s equity market as Chinese Premier Li Keqiang vowed that growth in the world’s second biggest economy is stabilizing even as it faces downward pressure. Meanwhile, the rupee extended gains amid optimism that India’s healthy macro fundamentals including a robust forex reserves kitty, shrinking twin deficits, strong economic growth, falling inflation which may lead to further interest rate cuts, coupled with reform progress and increased government spending may help Asia’s third biggest economy to ride out this period of volatility owing to the ongoing global stock rout.
Amidst fears over Fed rate tightening in the near-term, Asian markets succumbed to severe selling pressure on Thursday. Job openings in the US jumped by 430,000, the biggest advance since April 2010 to a record 5.75 million in July 2015, signaling a strengthening labour market recovery in the world’s biggest economy, bolstering the case for the Fed to initiate a lift-off in interest rates soon. China’s Shanghai Composite which jumped over 2 per cent yesterday shed more than 0.60 per cent today after producer prices sank the most in six years, tumbling 5.9 per cent, year on year in August 2015, shrinking for the 42nd straight month, while consumer prices increased at the fastest pace this year, up 2 per cent from the year ago month. Hang Seng tumbled by over 2 per cent while Japan’s Nikkei 225 which jumped the most since 2008 on Wednesday, shed 3 per cent as a stronger yen curbed the lure for exporter stocks . All three of Dow Jones Industrial Average, Nasdaq Composite and S&P 500 tanked over 1 per cent on Wednesday as traders weighed the prospects of a near-term Fed rate hike.
10/09/2015
Indian equity benchmarks are poised to snap a two-day winning streak as global markets bite the dust after stronger than expected US labour market data bolstered the case for the US Federal Reserve to begin tightening interest rates for the first time since 2006, souring the lure for risky assets. Job openings in the US soared to a record in July, putting the Fed’s two-day policy meet on September 16-17 in focus as the world’s top central bank prepares to exit the era of near zero interest rates in the US, keeping traders jittery. Against the backdrop of a bearish trend in markets across Asia and a steep sell-off at Wall Street overnight, coupled with weakness in the SGX CNX Nifty Index futures for September delivery which plunged by 1.16 per cent or 90 points at 7,732 at 10:26 am Singapore time, Dalal Street is set to witness a gap down opening today. Marking a two-day run of gains, the 30-share Sensex on Wednesday rallied 401.71 points or by 1.59 per cent to end at 25,719.58 as global markets rose on hopes that China may be able to maintain stability in the country’s equity market as Chinese Premier Li Keqiang vowed that growth in the world’s second biggest economy is stabilizing even as it faces downward pressure. Meanwhile, the rupee extended gains amid optimism that India’s healthy macro fundamentals including a robust forex reserves kitty, shrinking twin deficits, strong economic growth, falling inflation which may lead to further interest rate cuts, coupled with reform progress and increased government spending may help Asia’s third biggest economy to ride out this period of volatility owing to the ongoing global stock rout.
Amidst fears over Fed rate tightening in the near-term, Asian markets succumbed to severe selling pressure on Thursday. Job openings in the US jumped by 430,000, the biggest advance since April 2010 to a record 5.75 million in July 2015, signaling a strengthening labour market recovery in the world’s biggest economy, bolstering the case for the Fed to initiate a lift-off in interest rates soon. China’s Shanghai Composite which jumped over 2 per cent yesterday shed more than 0.60 per cent today after producer prices sank the most in six years, tumbling 5.9 per cent, year on year in August 2015, shrinking for the 42nd straight month, while consumer prices increased at the fastest pace this year, up 2 per cent from the year ago month. Hang Seng tumbled by over 2 per cent while Japan’s Nikkei 225 which jumped the most since 2008 on Wednesday, shed 3 per cent as a stronger yen curbed the lure for exporter stocks . All three of Dow Jones Industrial Average, Nasdaq Composite and S&P 500 tanked over 1 per cent on Wednesday as traders weighed the prospects of a near-term Fed rate hike.
