Pre Session- Subdued opening on the cards for Dalal Street amid China worries
08/01/2016
Indian equity benchmarks are poised to open on a flattish note on Friday amidst ongoing concerns over slowing growth in China and the depreciation of the Yuan that have rattled global financial markets, souring risk taking appetite. The CNX Nifty Index futures for January delivery climbed a paltry 0.05 per cent or 3.5 points at 7,576 at 10:24 am Singapore time, a sign that the Sensex may open little changed today. Chinese authorities on Friday decided to do away with a circuit-breaker system which caused an early close to trading twice in the week in a bid to ease market volatility. Analysts expect retail investors to stay on the sidelines amid heightened China fears with risks prevailing of a further depreciation of the Chinese currency as policymakers step up measures to steer the world’s second biggest economy from a hard landing. The sharp global equity sell-off has also forced foreign investors to press the exit button as they net sold USD 17 million of Indian equities on January 6. The next big domestic trigger for Dalal Street will be the Q3 corporate earnings data with IT bellwether Infosys set to kick-start the earnings season by unveilings its December quarter financial numbers next week. Marking a fourth straight session in the red, the 30-share Sensex nosedived 554.5 points or 2.18 per cent on Thursday to end at 24,851.83, a four-month low as China’s move to depreciate the Yuan to the lowest level since March 2011 stoked further fears over the health of Asia’s biggest economy. Asian stocks rallied handsomely on Friday after China abandoned a system of market circuit breakers while refraining from a further reduction in the Yuan’s reference rate, offering some comfort to investors, re-igniting the lure for riskier assets. China’s Shanghai Composite rose nearly 2 per cent after regulators scrapped the circuit breaker system for the week after a 7 per cent plunge each on Monday and Thursday led to early close of trading, helping to stabilize stock markets. The People’s Bank of China also moved to stabilize the Yuan by setting the currency’s reference rate little changed on Friday following eight straight days of depreciation. At the same time, the extreme swings witnessed in China’s stock markets in recent days have fuelled concerns over the government’s ability to manage an economy which probably grew at the weakest pace in more than two decades last year. Hang Seng was up nearly 1 per cent and Japan’s Nikkei 225 rose almost 0.40 per cent, with both bourses climbing for the first time in five sessions as China’s scrapping of a controversial circuit breaker system provided some reassurance to traders. Wall Street plunged on Thursday with benchmark S&P 500 marking its worst-ever four-day start to a year as the China rout spread across the globe with billionaire George Soros warning that a bigger crisis could be in the offing. China’s devaluation of the Yuan for eight straight days has raised concerns over a worsening slowdown in the country’s economy, erasing over USD 2 trillion of wealth from global equities. The Dow Jones Industrial Average plunged 2.32 per cent; the Nasdaq Composite dropped 3.03 per cent while S&P 500 fell 2.37 per cent.
08/01/2016
Indian equity benchmarks are poised to open on a flattish note on Friday amidst ongoing concerns over slowing growth in China and the depreciation of the Yuan that have rattled global financial markets, souring risk taking appetite. The CNX Nifty Index futures for January delivery climbed a paltry 0.05 per cent or 3.5 points at 7,576 at 10:24 am Singapore time, a sign that the Sensex may open little changed today. Chinese authorities on Friday decided to do away with a circuit-breaker system which caused an early close to trading twice in the week in a bid to ease market volatility. Analysts expect retail investors to stay on the sidelines amid heightened China fears with risks prevailing of a further depreciation of the Chinese currency as policymakers step up measures to steer the world’s second biggest economy from a hard landing. The sharp global equity sell-off has also forced foreign investors to press the exit button as they net sold USD 17 million of Indian equities on January 6. The next big domestic trigger for Dalal Street will be the Q3 corporate earnings data with IT bellwether Infosys set to kick-start the earnings season by unveilings its December quarter financial numbers next week. Marking a fourth straight session in the red, the 30-share Sensex nosedived 554.5 points or 2.18 per cent on Thursday to end at 24,851.83, a four-month low as China’s move to depreciate the Yuan to the lowest level since March 2011 stoked further fears over the health of Asia’s biggest economy. Asian stocks rallied handsomely on Friday after China abandoned a system of market circuit breakers while refraining from a further reduction in the Yuan’s reference rate, offering some comfort to investors, re-igniting the lure for riskier assets. China’s Shanghai Composite rose nearly 2 per cent after regulators scrapped the circuit breaker system for the week after a 7 per cent plunge each on Monday and Thursday led to early close of trading, helping to stabilize stock markets. The People’s Bank of China also moved to stabilize the Yuan by setting the currency’s reference rate little changed on Friday following eight straight days of depreciation. At the same time, the extreme swings witnessed in China’s stock markets in recent days have fuelled concerns over the government’s ability to manage an economy which probably grew at the weakest pace in more than two decades last year. Hang Seng was up nearly 1 per cent and Japan’s Nikkei 225 rose almost 0.40 per cent, with both bourses climbing for the first time in five sessions as China’s scrapping of a controversial circuit breaker system provided some reassurance to traders. Wall Street plunged on Thursday with benchmark S&P 500 marking its worst-ever four-day start to a year as the China rout spread across the globe with billionaire George Soros warning that a bigger crisis could be in the offing. China’s devaluation of the Yuan for eight straight days has raised concerns over a worsening slowdown in the country’s economy, erasing over USD 2 trillion of wealth from global equities. The Dow Jones Industrial Average plunged 2.32 per cent; the Nasdaq Composite dropped 3.03 per cent while S&P 500 fell 2.37 per cent.
