A weak start likely amid negative global cues

This Monday morning seems to have nothing exciting to offer for the bulls and we expect a weak start to the week. The global markets are trading in the negative terrain and the SGX Nifty is indicating a soft opening at 11,772, a mark down by 45 points. The big event of the budget is now behind us and there is not much in the way of big developments in today’s trading, so traders will position themselves for TCS Q1 earnings, which will be declared on July 9.  

The Asian markets have had a rock start to the week after a strong jobs report in the US dashed hopes of an interest rate cut by the US Fed. The Japanese stock index Nikkei 225 has lost 0.87 per cent, Hong Kong’s Hang Seng has moved lower by 1.46 per cent and China’s Shanghai Composite has slipped 0.44 per cent.

Back home, the markets made a stable opening on the big event day and, thereafter, the markets traded in a range in the first hour of the trading session. However, volatility crept in as FM Nirmala Sitharaman started presenting the maiden budget of Modi 2.0 government. Some of the announcements in the budget like tax on buyback and proposal to increase minimum level of public shareholding did not go down well with the market participants. As a result, the second half of trading session was completely dominated by the bears as sharp sell-off was seen and the markets closed with cuts of about a per cent. The Nifty dropped 1.14 per cent and BSE Sensex lost 0.99 per cent. The broader market indices plunged sharply with Nifty Midcap and Smallcap falling 1.60 per cent and 1.32 per cent, respectively. Talking about the sectoral performance, Nifty FMCG ended with modest gains of 0.28 per cent, followed by Nifty PSU Banks, which gained after the FM proposed to allocate Rs 70,000 crore for PSU banks' recapitalisation, while Nifty Metal and Nifty Realty nosedived 3.76 per cent and 3.57 per cent, respectively.  

In the US, traders returned to their trading desk after Thursday’s Independence Day holiday and were greeted with a stronger-than-expected monthly government employment report. However, this positive news threw cold water on the Fed rate cut expectations, which triggered a sell-off in the markets. However, in the end, markets staged a smart recovery and the losses were restricted. The Dow dipped 44 points, the S&P 500 lost 5 points and the tech-heavy Nasdaq Composite shed 8 points.

The markets in Europe ended the final trading session of the week in the negative terrain amid mixed economic data in the region. Germany’s DAX and France’s CAC 40 declined 0.49 per cent and 0.48 per cent, respectively, and UK’s FTSE 100 closed lower by 0.66 per cent.