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Markets likely to follow Wall Street's positive cues

Karan DSIJ
/ Categories: DSIJ Mindshare, Pre Morning
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Markets likely to follow Wall Street's positive cues

After a sharp sell-off in the last hour of trading on Wednesday, Indian indices hope for a recovery at the start of the session on Thursday, following positive close on the Wall Street overnight. At the time of writing, the SGX Nifty was trading higher by 25 points at 11,187 level. Market participants will eye quarterly results of Bajaj Finance, Bajaj Finserv, Hindalco and Praj Industries.  

A majority of the stocks in Asia are trading in the red, despite an optimistic close on the Wall Street overnight and some positive development on global trade front. The Japanese Nikkei 225 has plunged 1.05 per cent and Hong Kong’s Hang Seng has lost 0.63 per cent.

Back home, after hovering in the positive terrain for most part of the session, key benchmark indices plummeted in the last leg of the trading and resumed their downward momentum on Wednesday. Nifty and BSE Sensex ended the session with losses of over half a per cent each. The broader market indices underperformed the frontline gauges, with Nifty Midcap and Smallcap losing 0.68 per cent and 1.21 per cent, respectively. Talking about sectoral performance, barring Nifty IT and Nifty Realty, all other indices ended the session in the red, with Nifty Media and Nifty Metal ending as top losers.

After opening the session in the red, the US stocks reversed their course and scaled higher to end Wednesday's session in the positive terrain. The optimism on the Wall Street was seen with a report suggesting that the US may delay imposing new tariffs on automotive imports from Europe. Meanwhile, on the economic front, US retail sales dipped 0.2 per cent in the month of April and industrial production declined 0.5 per cent in April, both missing expectations. The Dow Industrial Average gained 0.5 per cent, the S&P 500 rose 0.6 per cent and the tech-heavy Nasdaq jumped 1.1 per cent.

European equities, after an initial setback, turned around to end the session in the green on Wednesday with Eurozone Q1 GDP growth accelerating QoQ and Germany’s economy returning to growth in the first quarter. Apart from this positive news, the other news that helped the auto sector to turn higher was that the White House was planning to delay imposing tariffs on auto imports from Europe. Germany’s benchmark DAX advanced 0.90 per cent, France’s CAC 40 index ended up by 0.62 per cent and UK’s FTSE surged 0.76 per cent.

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