Pre Market Report-Bearish opening on the cards for Dalal Street amid Fed caution
24/08/2016
Indian equity benchmarks are likely to witness a gap down opening on Wednesday tracking weakness across most Asian stocks as better-than-expected US housing data raised bets of a US interest rate hike this year, curbing risk taking appetite. Traders are also expected to err on the side of caution ahead of the August derivative contract expiry on Thursday. Losses in the CNX Nifty Index Futures for August delivery which were trading at 8,631.5, down by 0.26 per cent or 22.5 points at 10:34 AM Singapore time, signal that the Sensex may open lower today. All eyes are fixated on US Fed Chair Janet Yellen’s speech on Friday, which may offer some clarity from the Fed over its outlook for further tightening of borrowing costs in the world’s biggest economy. An indication by the world’s top central bank to raise interest rates in the near future could have a bearing on capital flows to emerging markets such as India. Volatility may remain high at the local bourses as traders roll over their positions due to the August Futures & Options (F&O) contract expiry this Thursday. Shares of drug firm Aurobindo Pharma will be in focus which on Tuesday reported a 24 per cent rise in Q1 profit at Rs 585.5 crore on better sales of generic drugs in US and Europe. Snapping a two-day drop, the 30-share Sensex on Tuesday climbed marginally by 4.67 points or by 0.02 per cent to 27,990.21 as investors weighed the prospects of a US rate hike in 2016.
Most Asian markets were lower on Wednesday amid caution ahead of Yellen’s speech on Friday which may offer more clues over when the Fed plans to raise interest rates next. Shanghai Composite was trading tad lower even as China’s leading index rose at a faster clip in July. Hang Seng fell but Japan’s Nikkei 225 advanced. Wall Street on Tuesday closed near record highs as upbeat home sales data signaled a robust recovery in the US economy while a rebound in oil prices also bolstered sentiment.US new home sales rose 12.4 percent to a 654,000 annualized pace in July, the highest level in nearly nine years. A gauge of US manufacturing stood at a solid 52.1 in August, compared to July’s 52.9, and above the neutral 50-mark, Markit said.
24/08/2016
Indian equity benchmarks are likely to witness a gap down opening on Wednesday tracking weakness across most Asian stocks as better-than-expected US housing data raised bets of a US interest rate hike this year, curbing risk taking appetite. Traders are also expected to err on the side of caution ahead of the August derivative contract expiry on Thursday. Losses in the CNX Nifty Index Futures for August delivery which were trading at 8,631.5, down by 0.26 per cent or 22.5 points at 10:34 AM Singapore time, signal that the Sensex may open lower today. All eyes are fixated on US Fed Chair Janet Yellen’s speech on Friday, which may offer some clarity from the Fed over its outlook for further tightening of borrowing costs in the world’s biggest economy. An indication by the world’s top central bank to raise interest rates in the near future could have a bearing on capital flows to emerging markets such as India. Volatility may remain high at the local bourses as traders roll over their positions due to the August Futures & Options (F&O) contract expiry this Thursday. Shares of drug firm Aurobindo Pharma will be in focus which on Tuesday reported a 24 per cent rise in Q1 profit at Rs 585.5 crore on better sales of generic drugs in US and Europe. Snapping a two-day drop, the 30-share Sensex on Tuesday climbed marginally by 4.67 points or by 0.02 per cent to 27,990.21 as investors weighed the prospects of a US rate hike in 2016.
Most Asian markets were lower on Wednesday amid caution ahead of Yellen’s speech on Friday which may offer more clues over when the Fed plans to raise interest rates next. Shanghai Composite was trading tad lower even as China’s leading index rose at a faster clip in July. Hang Seng fell but Japan’s Nikkei 225 advanced. Wall Street on Tuesday closed near record highs as upbeat home sales data signaled a robust recovery in the US economy while a rebound in oil prices also bolstered sentiment.US new home sales rose 12.4 percent to a 654,000 annualized pace in July, the highest level in nearly nine years. A gauge of US manufacturing stood at a solid 52.1 in August, compared to July’s 52.9, and above the neutral 50-mark, Markit said.
