Indian market may open on soft note following sell-off on Wall Street
It is said ‘when it rains, it pours’ and this is what the situation of Indian markets is this morning as they received bad news in abundance. To begin with the cues from Wall Street in overnight are fragile as the tech stocks came under hammering and the jobless claims rose more than the estimate.
Further, rating agency CRISIL has said that the Indian economy is expected to see a deeper contraction of 9 per cent in FY21. As a result, SGX Nifty traded with a downtick of 30 points at 11,430 levels.
The market participants would look forward to July industrial & manufacturing production data, which is scheduled to be released today, post-market.
Asian markets are seen recovering after initial turbulence which was caused due to a sharp fall on Wall Street overnight. Hong Kong’s Hang Seng was up by 0.55 per cent and Japan’s Nikkei has added 0.30 per cent. The sentiment in Nikkei 225 turned upbeat after a report indicated that Tokyo Metropolitan Government lowered its coronavirus alert status and it plans to ease voluntary measures on dining & travel. China’s Shanghai Composite was up by 0.16 per cent.
On D-Street, the bulls were back with a vengeance as the key benchmark indices registered a strong rally of over 1.5 per cent. Sensex settled above the 38,800 mark and Nifty ended just shy of the 11,450 mark. The show stopper of the day was Reliance Industries; the stock registered record closing high and the market cap of the company crossed $200 billion and it becomes the first Indian firm to get there. The broader indices too ended in green wherein Nifty Mid-cap and Small-cap gained 1.23 and 1.60 per cent, respectively. Barring Metals and Pharma, all the sectoral indices closed in positive territory.
After a strong rebound on Wednesday, the bulls on the Wall Street that seemed to have found their mojo back fell like a pack of cards on Thursday as selling in tech stocks resumed. The key catalyst for turning the sentiment sour on Wall Street was the weekly jobless claims which disappointed as they came in higher than estimate indicating that the labour market revival from the Coronavirus pandemic was derailed.
At the closing bell, the tech-heavy Nasdaq emerged as the worst hit as it fell nearly 2 per cent, followed by S&P 500 and Dow, which were down by 1.8 per cent and 1.5 per cent, respectively. European indices ended the day in red and the market participants took cues from European Central Bank (ECB) monetary policy which remained in line with the expectation as ECB leaves key interest rates unchanged.