Pre Session-Sensex set to extend losses on disappointing GDP data; global sell-off
01/09/2015
Indian equity benchmarks are poised to witness a bearish opening today as traders weigh tepid Q1 GDP numbers which show a slowdown in Asia’s third biggest economy while a worsening global equity rout sours risk taking appetite. The Indian economy expanded by 7 per cent, year on year in the June quarter of 2015, below expectations for a 7.4 per cent advance and slower than the 7.5 per cent growth witnessed in the last quarter of FY 2014-15, government data released after market hours showed. Markets in Asia extended the worst monthly sell-off since May 2012 as a worsening factory slump in China exacerbated concerns over the health of the world’s second biggest economy while Wall Street scripted a bearish finish overnight as fears over a potential rate hike by the Fed in September and slowing global growth dampened sentiment. Amidst a continued global stock turmoil and weakness in the SGX CNX Nifty Index futures for September delivery which plunged 1.46 per cent or 115 points at 7,885 at 10:38 am Singapore time, Dalal Street is set for a gap down opening today. Reversing Friday’s gains, the 30-share Sensex plunged by 109.29 points or by 0.41 per cent to end at 26,283.09 on Monday, marking its worst August in nearly four years as traders remained wary ahead of the release of the GDP data. Against the backdrop of a China induced global mayhem coupled with worries over a slowdown in the pace of reform execution, foreign investors pulled out a massive USD 2.52 billion from Indian stocks in August, the most since October 2008.
Asian stocks treaded water, extending the worst monthly sell-off since 2012 as the steepest contraction in a Chinese manufacturing gauge in three years last month signaled a deepening slowdown in Asia’s biggest economy. The official China manufacturing PMI fell to 49.7 in August from the neutral mark of 50 in July. China’s Shanghai Composite tumbled by more than 4 per cent as the poor factory data overshadowed steps taken by China to promote stable growth of the country’s capital markets and prop up beaten down equities, including encouraging listed firms to conduct mergers & acquisitions, buy back shares when prices are low and pay higher cash dividends. Hang Seng shed over 1 per cent while Japan’s Nikkei 225 lost over 2 per cent as a stronger yen curbed the lure for exporter stocks. American equities retreated on Monday; with benchmark S&P 500 posting its worst month in three years as spillovers from the turmoil in China shook Wall Street.
