Markets may open flat to negative; may witness recovery later

The Indian benchmark indices kicked off the week on a very sluggish note and closed the rangebound session on a marginally lower note. Nifty and Sensex ended 0.09% and 0.12% lower, respectivley, sans immediate triggers for the markets. Now all eyes are on the December quarter earnings and macro economic data. Pharma’s Dr. Reddy's dragged the sector and thereby the markets, while IT witnessed short covering and closed higher.

US markets witnessed profit booking from their all time high levels, wherein Dow failed to cross its 20000 mark and closed down at 19887 as investors remained worried over the earnings season. S&P 500 too slipped 0.4%, weighed by a decline in oil and financial stocks. However, the Nasdaq rose 0.2% hitting an intraday record high, driven by healthcare stocks and recovery in the IT stocks.

Most of the European bourses closed lower in the wake of disappointing earnings report from heavyweights like Deutsche Lufthansa and William Hill and a retract in oil prices. Moreover, the Pound devaluated after UK president cued hardships for UK ahead, after parting from the EU. France's CAC 40 remained down 0.45%; and Germany's DAX was 0.3% down. However, FTSE 100 remained up 0.38%.

Asian equities started off  theweek on a mixed note where Shanghai Composite and Nikkei 225 remained marginally down while Hang Seng remained up. Going forward Asian markets may remain subdued owing to a decline in oil prices due to a supply glut, and Pound depreciation on worries about a  tough life post Brexit.

We have IndusInd Bank's results to be released today which may drive the markets. Moreover, SGX Nifty is trading a bit higher at 8264 with 0.2% gains. However, the global bourses have somewhat failed to cheer the sentiments in the last trading session. On the domestic front, the government has also cued towards extending the capital gains  tax exemption upto 3 years from the present 1 year, keeping tax relief as it is for long term gains. Markets may start on a flat to negative note but may recover in case of positive intraday triggers.