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Updated on: Friday, August 20, 2021, 09:12 AM IST

Markets likely to open lower; trends on SGX Nifty indicate gap-down opening for indices

 AFP PHOTO / FRED DUFOUR

AFP PHOTO / FRED DUFOUR

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Trends on SGX Nifty indicate a gap-down opening for the index in India. The Nifty futures were trading at 16,373 on August 20 against August 18 close of 16,572 .

Indian benchmark indices are expected to open in the red as trends on SGX Nifty indicate a gap-down opening, said Mohit Nigam, Head-PMS, Hem Securities. Global Share markets and oil prices fell on Thursday after the US Federal Reserve warned it could soon start to cut back its support for the economy. An increase in coronavirus in some countries, signs of Chinese economic weakness and the Taliban's takeover of Afghanistan also spooked investors. Despite the wall of worry which investors are being forced to climb, the main Indian Indices are still comfortably in positive territory.

Indian markets could open sharply lower, in line with the two day losses in the Asian markets and negative US markets on Wednesday, said Deepak Jasani, Head, Retail Research, HDFC Securities.

"Nifty is expected to open at 16,350, down by 200 points. On Wednesday after making a life time high there was heavy selling in Nifty and it closed 40 points in negative. This was not a good sign for longs. Nifty has support at 16350, any closing below that can drag it to 16150. It is important to keep strict stop-loss in such markets." saidGaurav Udani, Founder & CEO, ThincRedBlu Securities.

Asian markets decline

Shares in Asia-Pacific mostly fell in Friday trade as China left its benchmark lending rate unchanged. Mainland Chinese stocks fell as the Shanghai composite declined about 1 percent, and the Shenzhen component slipped 1.013 percent.

Hong Kong’s Hang Seng index shed dropped 1.18 percent.The Nikkei 225 in Japan fell 0.74 percent, in morning trade while the Topix index shed 0.5 percent.

Dollar advances

The US dollar advanced to a nine-month high on Thursday, as worries about widespread coronavirus infections and Federal Reserve meeting minutes showing policymakers considering reducing pandemic-era stimulus this year hit global stocks and commodity-linked currencies.

The dollar index , which measures its performance against six currencies, hit 93.434, its highest since early November last year. It was last up 0.2 percent at 93.273.

Oil prices skid

Oil prices skidded on Thursday for a sixth session, hitting lows not seen since May, pressured by a stronger US dollar and concerns about weaker demand as COVID-19 cases rise.

The oil market rallied throughout the first half of 2021, but the newest wave of coronavirus infections throughout the world has sapped global travel and threatens economic activity. That comes just as major oil producers are readying supply increases and as U.S. drilling activity edges up.

Brent crude was down $2.42, or 3.6 percent, to $65.82 a barrel by 11:32 AM EDT (1532 GMT), after touching $65.57, lowest since May 21.

Seven stock under F&O ban

Seven stocks are under the F&O ban today: Cadila Healthcare, Canara Bank, NALCO, Punjab National Bank, SAIL, Sun TV Network and Vedanta.

Companies making market debut today

Multi-channel auto platform CarTrade Tech is expected to make a decent debut on the bourses considering its business model, the first-mover advantage in the sector and future growth prospects. Equity shares will list on the BSE and NSE on August 20.

The initial public offering of CarTrade saw a strong subscription during August 9-11, getting subscribed 20.29 times driven by institutional and non-institutional investors. The reserved portion of qualified institutional buyers was subscribed 35.45 times and that of non-institutional investors witnessed 41 times subscription. The retail portion was booked 2.75 times.

Emcure Pharmaceuticals, on August 19 filed its Draft Red Hearing Prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) for its proposed initial public offer (IPO).

The initial public offering comprises a fresh issue of equity shares aggregating up to Rs. 1,100 crore and an offer for sale of up to 18,168,356 equity shares that include promoters - Satish Mehta selling up to 2,030,000 equity shares and Sunil Mehta aggregating up to 2,50,000 equity shares. Other selling shareholders include private equity investor Bain Capital, as well as certain individual selling shareholders.

US unemployment benefits numbers low

The number of people seeking unemployment benefits fell last week for a fourth straight time to a pandemic low, the latest sign that America's job market is rebounding from the pandemic recession as employers boost hiring to meet a surge in consumer demand.

The Labor Department reported Thursday that jobless claims fell by 29,000 to 348,000. The four-week average of claims, which smooths out week-to-week volatility, also fell — by 19,000, to just below 378,000, also a pandemic low.

The weekly pace of applications for unemployment aid has fallen more or less steadily since topping 900,000 in early January. The dwindling number of first-time jobless claims has coincided with the widespread administering of vaccines, which has led businesses to reopen or expand their hours and drawn consumers back to shops, restaurants, airports and entertainment venues.

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Published on: Friday, August 20, 2021, 09:03 AM IST
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