Pre Market Report: Gap down opening seen for Sensex on Asia weakness
23/08/2016
Indian equity benchmarks are likely to witness a negative opening on Tuesday tracking a mostly bearish trend across markets in Asia and a tepid finish at Wall Street overnight as investors across the globe await Fed Chair Janet Yellen’s speech on Friday at Jackson Hole, in which she may offer some cues over the timing of the next US interest rate hike, curbing risk taking appetite. Losses in the CNX Nifty Index Futures for August delivery which were trading at 8,616.5, down by 0.13 per cent or 11 points at 10:20 AM Singapore time, signal that the Sensex may open lower today. Traders are seeking more clarity from the Fed over its outlook for further tightening of borrowing costs in the world’s biggest economy. While FOMC minutes last week showed that officials in July were split over the need to raise interest rates again in the near-term as they agreed to wait for some more data before deciding on such a move, some top Fed officials signaled tilting towards a hawkish policy stance, raising bets of a December rate hike. Tightening of US monetary policy may lead to volatility in capital flows to emerging markets such as Asia’s third biggest economy. Meanwhile, fading hopes of an interest rate cut following the appointment of Urjit Patel as the new RBI Governor may continue to weigh on sentiment at Dalal Street. Patel is unlikely to ease policy further in the near-term due to high inflation as he carries on Rajan’s legacy of being an inflation hawk. 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. The 30-share Sensex on Monday fell 91.46 points or by 0.33 per cent at 27,985.54, marking a second straight session in the red, as traders were cautious over a further interest rate reduction from the RBI.
Most Asian markets were lower today led by decline in energy producers on weakness in crude prices while traders weighed the prospects of a US rate hike this year. Shanghai Composite logged modest gains even as China’s business sentiment indicator fell 1.2 points to 54.3 in August. Hang Seng declined and Japan’s Nikkei 225 was trading lower as a stronger yen dimmed the appeal of exporter stocks.US stocks ended on a listless note on Monday after Federal Reserve Vice Chairman Stanley Fisher said that the US economy was closer to meeting the central bank’s goals, raising speculation of a 2016 interest rate hike, while oil snapped the longest winning run in four years
23/08/2016
Indian equity benchmarks are likely to witness a negative opening on Tuesday tracking a mostly bearish trend across markets in Asia and a tepid finish at Wall Street overnight as investors across the globe await Fed Chair Janet Yellen’s speech on Friday at Jackson Hole, in which she may offer some cues over the timing of the next US interest rate hike, curbing risk taking appetite. Losses in the CNX Nifty Index Futures for August delivery which were trading at 8,616.5, down by 0.13 per cent or 11 points at 10:20 AM Singapore time, signal that the Sensex may open lower today. Traders are seeking more clarity from the Fed over its outlook for further tightening of borrowing costs in the world’s biggest economy. While FOMC minutes last week showed that officials in July were split over the need to raise interest rates again in the near-term as they agreed to wait for some more data before deciding on such a move, some top Fed officials signaled tilting towards a hawkish policy stance, raising bets of a December rate hike. Tightening of US monetary policy may lead to volatility in capital flows to emerging markets such as Asia’s third biggest economy. Meanwhile, fading hopes of an interest rate cut following the appointment of Urjit Patel as the new RBI Governor may continue to weigh on sentiment at Dalal Street. Patel is unlikely to ease policy further in the near-term due to high inflation as he carries on Rajan’s legacy of being an inflation hawk. 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. The 30-share Sensex on Monday fell 91.46 points or by 0.33 per cent at 27,985.54, marking a second straight session in the red, as traders were cautious over a further interest rate reduction from the RBI.
Most Asian markets were lower today led by decline in energy producers on weakness in crude prices while traders weighed the prospects of a US rate hike this year. Shanghai Composite logged modest gains even as China’s business sentiment indicator fell 1.2 points to 54.3 in August. Hang Seng declined and Japan’s Nikkei 225 was trading lower as a stronger yen dimmed the appeal of exporter stocks.US stocks ended on a listless note on Monday after Federal Reserve Vice Chairman Stanley Fisher said that the US economy was closer to meeting the central bank’s goals, raising speculation of a 2016 interest rate hike, while oil snapped the longest winning run in four years
