Market May Open Slightly Higher
A benchmark index of Indian equities markets slumped nearly 2% on yesterday due to weak trade deficit data, sliding oil prices and a falling rupee. Sensex closed at 26,781.44 points, down by 538.12 points i.e. 1.97% which is the biggest drop since September 3, 2013 when the BSE index tumbled by 651 points. Nifty touched the day’s low of 8,052.60 before settling down by 152 points, i.e. 1.85% at 8,067.60. The BSE small-cap index lost 3.36% and the mid-cap index fell 2.96%.
Trade deficit widened to 18-month high of USD 16.86 billion in November due to over six-fold jump in gold imports even as merchandise exports grew by 7.27%. Trade deficit in November last year was USD 9.57 billion.
Globally, the U.S. stock market closed in negative after roller-coaster ride influenced by sudden twists in the price of oil and currency trading. US equities market opened lower as falling oil prices and a plunge in the Russian ruble weighed on markets. Less than an hour later, crude oil recovered and oil and gas producers surged, driving the Dow Jones industrial average up as much as 246 points in the morning. By the end of the day, however, all of the gains were wiped out.
The Dow Jones Industrial Average dropped 111.97 points (0.7%), to 17,068.87, with more than two-thirds of its components ending with losses. The S&P 500 index ended with a loss of 16.89 points (0.9%), to 1,972.74. The Nasdaq Composite dropped 57.32 points (1.2%), to 4,547.83 as technology stocks sold off.
US Federal Reserve officials began their two-day meeting overnight, in which they will debate when to lift the benchmark interest rate, which has been near zero since 2008.
After a day of volatile trading on yesterday Europe's main stock markets closed sharply higher following Kerry's remarks: “These sanctions could be lifted in a matter of weeks or days, depending on the choices to reverses course in Ukraine that President Putin takes.” European stocks recovered from early losses, with the STOXX Europe 600 closing up 1.7% after losing 1.3% earlier in the session with London's benchmark FTSE 100 index rising 2.41% to 6,331.83 points. The Paris CAC 40 rose 2.19% to 4,093.20 points and Frankfurt's DAX 30 gained 2.46% to 9,563.89 points.
Asian markets open with mixed ahead of a Federal Reserve policy decision. The Topix climbed 0.37% percent to 1,358.38 in Tokyo, reversing a decline by the same amount. The Nikkei 225 rose 0.8 percent to 16,886.33. Japan's trade deficit in November shrank by nearly a third from a year earlier, helped by higher exports and lower bills for oil imports. The deficit came to 891.9 billion yen (USD 7.6 billion), down 31.5% from the year before shortfall. The Hang Seng Index slipped 0.13% to 22,642. The Shanghai Composite has advanced 0.88% to 3048.24. The SGX Nifty is open lower by 8 points. Today Indian market may open slightly higher and going forward may see the volatility during a day.