Markets may open with a gap-up riding on global optimism
The outlook for the Indian markets is a gap-up opening on the back of optimism in the global markets. The US and China will restart trade negotiations to reach a deal, Also, the ECB President surprised the markets by hinting at more stimulus if needed. At the time of writing, the SGX Nifty was trading higher by 50 points at 11,762.
The Asian markets were seen advancing on Wednesday following strong leads from the Wall Street overnight. The Japanese stock index Nikkei 225 has gained 1.72 per cent, Hong Kong’s Hang Seng has climbed 2.26 per cent and the Kospi has moved higher by 1.11 per cent.
Back home, it was a roller-coaster ride for the key equity benchmark indices as they swung both ways before settling with modest gains at the close of Tuesday’s session. Markets began the session on a flat note and then slowly but steadily built upon early gains. However, in the afternoon session, the markets turned volatile and, in the end, Nifty and BSE Sensex settled with minuscule gains of 0.17 per cent and 0.22 per cent, respectively. The broader market indices like the Nifty Midcap and Smallcap ended lower, thereby underperforming the frontline gauges. Mixed trend was observed on the sectoral front, with top gainers being Nifty IT and Nifty Metal, while top losers being Nifty Pharma and Nifty Auto.
On the Wall Street, the major indices rallied on Tuesday after the US President Donald Trump tweeted that he had a “very good” telephone conversation with President Xi of China and will have an extended meeting at the G20 summit next week. The tweet from President Trump led to renewed optimism that the world’s two largest economies could finally come to an agreement to end their long-standing trade dispute. The Dow jumped 1.4 per cent, the S&P 500 rose 1 per cent and the tech-heavy Nasdaq surged 1.4 per cent.
Tuesday’s session turned out to be a fantastic day for the bulls as key European indices ended firmly in the green. The boost to the European markets emerged from dovish comments from ECB President Mario Draghi, who indicated that the bank will announce more stimulus, which could be through rate cuts or asset purchases, to bolster growth. France’s CAC 40 index and Germany’s DAX soared 2.2 per cent and 2.03 per cent, respectively, while UK’s FTSE 100 advanced 1.17 per cent.