Pre Market Report- Gap down opening likely for D-Street on global monetary policy uncertainty
15/09/2016
Indian equity benchmarks are likely to witness a bearish opening on Thursday tracking weakness across many markets in Asia and a soft finish at Wall Street overnight as traders worldwide stick to a cautious approach ahead of key central bank meetings in Japan and the US next week while a slide in oil prices raised worries over the health of the world economy. The CNX Nifty Index Futures for September delivery which were trading at 8,750, down by 0.22 per cent or 19.5 points at 10:38 AM Singapore time, signal that the Sensex may open lower today. Reduced prospects of central bank monetary stimulus from key developed economies coupled with uncertainty surrounding the exact timing of a US interest rate hike may continue to keep sentiment choppy at Dalal Street and may lead to some volatility in capital flows to Asia’s third biggest economy. Meanwhile, rising expectations of an interest rate cut by the RBI in October after consumer inflation dipped to a five-month low to below the upper tolerance level of the government’s official annual inflation target, in August, may continue to offer support to domestic bourses. At the same time, wholesale inflation jumped to a two-year high of 3.74 per cent in August 2016 from 3.55 per cent in July 2016. Shares of Reliance Communication maybe in focus as the company said that it will merge its wireless business with Aircel, creating India’s third largest telecom operator by users. Reliance Communication’s Q1 FY 2016-17 consolidated net profit rose 5.8 per cent at Rs. 54 crore. In the wake of continued uncertainty over global monetary outlook, the 30-share Sensex closed flat, with a positive bias on Wednesday, up 18.69 points or by 0.07 per cent at 28,372.23.
Asian stocks retreated for a sixth day as cautioned ruled sentiment ahead of upcoming central bank meetings next week. Even as the US Fed is pondering over an interest rate lift-off, analysts are divided over whether the Bank of Japan will dish out further monetary stimulus next week but could cut interest rates deeper into the negative territory. Traders are also cautious ahead of the Bank of England meeting today and US industrial output & retail sales numbers for August which may offer cues over the health of the world’s biggest economy and could dictate the outlook for the country’s monetary policy. Shanghai Composite was closed today, Hang Seng logged modest gains while Japan’s Nikkei 225 sank over 1 per cent as a stronger yen curbed the lure for exporter stocks. Wall Street ended on a lackluster note on Wednesday with the Dow and S&P 500 witnessing slim to modest losses as traders stayed on the sidelines on monetary policy uncertainty.
15/09/2016
Indian equity benchmarks are likely to witness a bearish opening on Thursday tracking weakness across many markets in Asia and a soft finish at Wall Street overnight as traders worldwide stick to a cautious approach ahead of key central bank meetings in Japan and the US next week while a slide in oil prices raised worries over the health of the world economy. The CNX Nifty Index Futures for September delivery which were trading at 8,750, down by 0.22 per cent or 19.5 points at 10:38 AM Singapore time, signal that the Sensex may open lower today. Reduced prospects of central bank monetary stimulus from key developed economies coupled with uncertainty surrounding the exact timing of a US interest rate hike may continue to keep sentiment choppy at Dalal Street and may lead to some volatility in capital flows to Asia’s third biggest economy. Meanwhile, rising expectations of an interest rate cut by the RBI in October after consumer inflation dipped to a five-month low to below the upper tolerance level of the government’s official annual inflation target, in August, may continue to offer support to domestic bourses. At the same time, wholesale inflation jumped to a two-year high of 3.74 per cent in August 2016 from 3.55 per cent in July 2016. Shares of Reliance Communication maybe in focus as the company said that it will merge its wireless business with Aircel, creating India’s third largest telecom operator by users. Reliance Communication’s Q1 FY 2016-17 consolidated net profit rose 5.8 per cent at Rs. 54 crore. In the wake of continued uncertainty over global monetary outlook, the 30-share Sensex closed flat, with a positive bias on Wednesday, up 18.69 points or by 0.07 per cent at 28,372.23.
Asian stocks retreated for a sixth day as cautioned ruled sentiment ahead of upcoming central bank meetings next week. Even as the US Fed is pondering over an interest rate lift-off, analysts are divided over whether the Bank of Japan will dish out further monetary stimulus next week but could cut interest rates deeper into the negative territory. Traders are also cautious ahead of the Bank of England meeting today and US industrial output & retail sales numbers for August which may offer cues over the health of the world’s biggest economy and could dictate the outlook for the country’s monetary policy. Shanghai Composite was closed today, Hang Seng logged modest gains while Japan’s Nikkei 225 sank over 1 per cent as a stronger yen curbed the lure for exporter stocks. Wall Street ended on a lackluster note on Wednesday with the Dow and S&P 500 witnessing slim to modest losses as traders stayed on the sidelines on monetary policy uncertainty.
