DSIJ Mindshare

Markets Looking For New Trigger!!

Global market showed signs of weakness in the past couple of weeks, with majority of the indices sliding down owing to political turmoil in Europe and rising crude oil prices. The crude oil prices corrected marginally after a sharp rally took the Brent crude oil prices to $65 per barrel. 

One of the major events that took the Indian equity markets by surprise was the Moody’s decision to upgrade India’s sovereign rating. The Moody’s upgrade almost reversed the trend for the broader markets and pushed major benchmark indices near their all-time highs.

Over the last fifteen days, the major benchmark indices underperformed the broader markets. Sensex and Nifty slipped lower by 1.10 per cent and 1.46 per cent, respectively, in the past couple of weeks in line with global indices. The Mid-cap and Small-cap indices closed flat with a negative bias. The Mid-cap index managed to close down by 0.07 per cent and the Small-cap index settled lower by 0.91 per cent. Among the sectoral indices, the IT index was the best performing index, gaining more than 2 per cent, followed by Realty index which was up by 1.25 per cent.

Bankex inched up by 0.77 per cent during the same period. Metal index was the worst performer, along with Power and Auto indices, which were down by 3.67 per cent and 1.70 per cent, respectively. 

The FIIs remained net sellers to the tune of Rs 2187.31 crore, even as the DIIs continued the buying momentum by investing Rs 6670.62 crore over the past two weeks. 

Majority of the global indices remained in the negative territory with European indices underperforming the US indices. Dow Jones Industrial Average was down by 0.50 per cent, while NASDAQ closed 0.06 per cent up. German DAX was the worst performing index, slipping by 3.05 per cent, followed by the French CAC40 which was down by 3.03 percent. The FTSE of the UK slid 2.29 per cent. The European markets declined owing to political turmoil in Germany. Japan’s Nikkie was down by 1.27 per cent even as Hang Seng bucked the global trend and closed higher by 2.32 per cent. China’s Shanghai was flat and managed to close higher by 0.12 per cent

The market has cheered the better-thanestimated corporate earnings in Q2FY18. Going ahead, the earnings are expected to improve and that may keep the valuations running ahead.

Investors are keeping a close watch on what happens to the USD and euro as the USD seems to be slipping down. Tension surrounding crude oil prices also seems to be ebbing. Markets will be looking for new trigger now that earnings, crude oil prices and Moody’s ratings are all discounted.

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