Pre Market Report : 28.07.2016
Pre Market Report- Dalal Street to open flat on weak Asia trend; F&O expiry eyed 28/07/2016
Indian equity benchmarks are likely to open on a flattish note on Thursday as investors resort to a cautious approach ahead of the July derivatives expiry and a sell-off across markets in Asia following the US Federal Reserve’s decision overnight with the world’s top central bank reiterating its intention to tighten interest rates gradually even as the US economy shows signs of improvement. The CNX Nifty Index Futures for July delivery were trading at 8,614.5, up 0.07 per cent or 6 points at 10:29 AM Singapore time, signaling that Dalal Street may open little changed today. Volatility may remain high at domestic indices as traders roll over their positions ahead of the July futures & options (F&O) contracts’ expiry today. Shares of Punjab National Bank, Dish TV and Syndicate Bank will be in focus amidst their April-June quarter earnings announcements. However, optimism over the passage of the GST bill in the ongoing monsoon session of the Parliament after a consensus between states and the centre over key issues including scrapping the 1% manufacturing tax and giving full compensation to states for five years for potential revenue losses after the new system is implemented will support sentiment. The 30-share Sensex on Wednesday rallied by 47.81 points or by 0.17 per cent to end at 28,024.33 amid GST optimism.
Asian stocks fell as traders were cautious ahead of the Bank of Japan policy decision on Friday while digesting the outcome of the FOMC meet on Wednesday. The Fed on Wednesday decided to keep interest rates unchanged while stressing that the risks to the world’s biggest economy have now subsided with the labour market recovery gaining traction, a sign that conditions to tighten monetary policy are now becoming more favorable. The Bank of Japan is likely to bolster stimulus at the end of a two-day meet on July 29. China’s Shanghai Composite retreated amid fears that regulators are planning to curb the use of wealth-management product proceeds in stock investments, Hang Seng fell and Japan’s Nikkei 225 was trading lower amid Bank of Japan caution. US stocks ended mixed on Wednesday as traders assessed the FOMC decision for clues over the timing of the next rate hike. Meanwhile US economic data signaled a strong recovery in place as capital goods orders rose in June for the first time in three months and pending home sales ticked up 0.2 per cent last month.
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