Monday 31 August 2015

BSE Sensex Likely to Open Lower Amid Weak Asian Markets: 10 Developments

Indian markets are likely to open lower today, tracking weak Asian markets. Uncertainty over Fed rate hike and concerns about China weighed on global markets today.

Here are top 10 developments

1) The SGX CNX Nifty was down 0.60 per cent at 7,973, indicating a weak start to Indian markets.

2) Stock markets in China were down nearly 3 per cent today, dragging down major Asian markets.

3) Asian stocks sagged on Monday after top Federal Reserve officials kept the door open for an interest rate hike in September and investors braced for China economic data this week.

4) Fed Vice Chairman Stanley Fischer, speaking at the central bank' conference in Jackson Hole, Wyoming, said recent volatility in global markets could ease and possibly pave the way for a rate hike.

5) Global markets ended last week on a calmer note, however, helped by easing steps from the People's Bank of China and other government support measures, and hopes that the Fed would delay hiking rates following this month's tumult in financial markets.

6) Coming back to Indian markets, analysts say that unless selling pressure from foreign institutional investors abates, the gains in Indian markets may remain capped. Foreign institutional investors hold nearly 25 per cent of BSE 200 stocks.

7) Foreign investors bought Indian shares worth Rs 56 crore on Friday. In the previous seven sessions before Friday, they sold Indian shares worth nearly Rs 16,500 crore. In contrast, domestic institutional investors have been big buyers of Indian equities in the past few days, offering some support to Sensex and Nifty.

8) The value of the rupee would also be under focus with as it impacts the returns of foreign investors in dollar terms. During the previous week, the rupee pulled back from near two year lows of 66.76/dollar to end at 66.14/dollar on Friday. The rupee traded lower at 66.23/dollar in early trade today.

9) Market analysts would also be watching for the June-September gross domestic product (GDP) data which is due to be announced at 5:30 p.m. today. The median estimate from a Reuters poll of economists put GDP annual growth at 7.4 per cent in the quarter, just below 7.5 per cent in January-March.

10) Apart from the GDP data, monthly auto sales numbers and August services and manufacturing data will also be released during this week. Besides global cues, these domestic data could dictate the trend in Indian markets in the short term, analysts say.        

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