Wednesday 9 September 2015

Sensex Poised to Open Higher Amid Global Rally

BSE Sensex and Nifty are likely to sharply higher, boosted by a rally in global markets. The SGX CNX Nifty was up 1.4 per cent to 7,844, indicating a higher opening for Indian markets.

Here is a 10-Point Cheat-Sheet:

1) Asian markets, including China, were trading sharply higher with Japan's Nikkei surging nearly 6 per cent. China's benchmark indices were up nearly 2 per cent.

2) US stocks rose more than 2 per cent overnight amid a China-fuelled rebound in global equities. Hopes for more stimulus measures from the Chinese government increased after data on Tuesday showed that China's imports shrank far more than expected in August, falling for the 10th straight month.

3) China also said it would remove a tax on dividend incomes for investors who hold stocks for more than a year in an effort to encourage longer-term investment. This triggered rebound in China markets yesterday.

4) Data showing Germany saw imports and exports hit record highs in value terms in July also helped the global rally in equities.

5) Analysts also said that global markets were in an oversold territory which helped to spur a relief rally.

6) Analysts however are skeptical of the sustainability of gains in Indian markets in the face of relentless selling from foreign investors.

7) Indian markets are also witnessing an exodus from foreign investors who sold a record Rs 16,877 crore worth of domestic stocks in August. On top of that, they sold Indian stocks worth nearly Rs 5,500 crore in the past six sessions.

8) Domestic institutional investors have been buyers of stocks despite the selloff from foreign investors, helping to provide some support to Indian markets. On Tuesday, they bought shares worth nearly Rs 450 crore. Despite Sensex and Nifty losing over 6 per cent in August, investments into Indian mutual funds surged in August from July, signalling the continued retail support for equities despite a deteriorating outlook. Investments into equity mutual funds rose 63 per cent to Rs 9,625 crore last month from July, marking a 16th consecutive month of inflows.

9) Indian markets are likely to remain volatile till the crucial US Fed meet, which is scheduled for September 16-17, say analysts. An interest rate hike in the US could accelerate the selling from foreign investors who would like to park their money in US bonds. Besides, a rate hike in the US would strengthen the dollar, putting further pressure on rupee.

10) Traders are also watching the value of the rupee which affects the dollar returns of foreign investors. The rupee traded higher at 66.33/dollar against yesterday's close of 66.54.        

No comments:

Post a Comment