Markets may open in the negative following bearish global cues

Judging by early action in the SGX Nifty, it appears that the Indian benchmark indices could open the session on a negative note as the mood of the markets worldwide has turned to bearish after the recent comments by a Fed official poured cold water over hopes of half point rate cut in July. At the time of writing, SGX Nifty was trading lower by 23 points at 11,769 level. Over the past seven trading sessions, Nifty has faced resistance around its 20-DMA, which is currently placed at 11,856 and, going ahead, only a sustainable move above this level could provide fresh impetus to the pullback seen on Tuesday.

The Asian stocks fell in early trading on Wednesday following sell-off seen on the Wall Street in overnight trade as investors' hopes for a rate cut next month were dampened when St. Louis Fed Chief Bullard stated that he did not see the need for a half point rate cut in July. The Japanese stock index Nikkei 225 has lost 0.53 per cent, Hong Kong’s Hang Seng has slipped 0.50 per cent and the Kospi has dipped 0.09 per cent.   

Back home, Tuesday turned out to be a terrific day for the bulls as equity benchmark indices staged a smart comeback and ended the day near their day’s high. The BSE Sensex and Nifty jumped 0.80 per cent and 0.83 per cent, respectively. The broader market indices ended the day with healthy gains as Nifty Midcap and Smallcap surged 0.69 per cent and 0.64 per cent, respectively. All the secotral indices ended in the green, with Nifty Metal and Nifty PSU Bank being the top gainers.

All of the Wall Street’s major indices finished in the red and near the lows of the day on Tuesday, weighed down by comments from Fed official which dampened a widely anticipated rate cut in July. Adding fuel to the fire was the news from economic front as a few key economic data were weaker than anticipated. The consumer confidence had reached its lowest level since September 2017 and the new home sales had fallen. The Dow Jones Industrial Average plunged 0.7 per cent, tech-heavy Nasdaq Composite index plummet 1.5 per cent and the S&P 500 index declined 1 per cent.

A majority of the European indices ended Tuesday’s session with modest losses. Germany’s DAX and France’s CAC 40 index declined by 0.38 per cent and 0.13 per cent, respectively, while UK’s FTSE 100 added 0.08 per cent.