Pre Session- Dalal Street to snap two-day rout
04/06/2015
Indian equity benchmarks are poised to recover from a two-day slump on Thursday as a positive trend in fellow Asian peers and a bullish finish overnight at Wall Street bolster the lure for risky assets. Moreover, the sharp losses suffered in the past two sessions with the Sensex shedding a massive 1,012 points on Tuesday and Wednesday combined, falling below the 27K level, may offer good bargain buying opportunity to investors, at existing levels. The 30-share Sensex tanked 351.18 points or 1.29 per cent to end at 26,837.2, while the NSE Nifty closed at 8,135.1, down by 101.35 points or by 1.23 per cent on Wednesday as weak corporate earnings, worries over a spike in inflation amidst a downgraded monsoon forecast and reduced scope over further interest rate cuts by the RBI wrecked havoc. Moreover, renewed contraction in Indian services activity for the month of May signaled doubts over the health of Asia’s third biggest economy despite the upbeat March GDP data released last week. The HSBC Services PMI fell to 49.6 in May from 52.4 in April, signaling contraction in the sector for the first time in 13 months. Strength in the SGX CNX Nifty Index futures for June delivery which rose by 0.20 per cent at 8,159 at 10:32 am Singapore time, signal a gap up opening at Dalal Street on Thursday. Meanwhile, major Asian markets were trading higher on Thursday amid optimism over a Greek debt deal as the country’s Prime Minister Alexis Tsipras stressed that there wasn’t any need to worry over the first of the four repayments due to the IMF on Friday. Shares in Mainland China and Hong Kong rose as May services PMI hinted at a recovery in the world’s second biggest economy, while Japan’s Nikkei 225 was lifted by a weaker yen which bolstered the appeal of exporter stocks. American equities closed with modest gains on Wednesday on Greek deal optimism even as investors weighed mixed US data. While services activity in the US expanded at the slowest pace in 13 months in May, private employers added 201,000 jobs, up from 165,000 in April. Meanwhile, the European Central Bank (ECB) on Wednesday stuck to record low interest rates as it signaled that QE was working well, helping to avert the risk of deflation in the 19-member Euro area economy.
