Indian markets could open flat despite mostly higher Asian markets today and higher US markets on Friday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
Nifty once again could not hold on to intra day gains and sold off post 1315 Hrs on May 13. It closed 0.16 percent or 26 points lower at 15782.2, in the negative for the fifth consecutive session. For the week, Nifty fell for the fifth consecutive week falling 3.8 percent.
The fact that Nifty keeps witnessing selling pressure on rises during the day is disappointing. Nifty is displaying lack of strength to sustain at highs. 15671 is the near term low where the Nifty could take support. Small and Midcap stocks are almost on the verge of entering bear market territory and continue to see higher amounts of weakness impacting broad market sentiments, Jasani said.
Prashanth Tapse, Vice President (Research), Mehta Equities Ltd, said, a sharp recovery in the US markets on Friday and subsequent gains in SGX Nifty in early trades today is hinting a gap up start for our stock markets. However, cautious trend could prevail as the street will anxiously await to the WPI Inflation numbers slated to trickle in on Tuesday.
"We expect the inflation numbers are likely to be higher, just like the CPI Inflation numbers that trickled in last week. We suspect, the benchmarks at Dalal Street to trade volatile with upside capped and probably collapse heavily if Nifty slips below its biggest support at 15671 mark. With Fed and other central banks across the globe trying to rein on inflation desperately, it’s going to be a tough call to take bullish bets even on any dips from hereon", added Tapse.
Asian markets firm up in early trade
Asian share markets were attempting a rare rally on Monday after Wall Street managed a bounce from deep lows, though investors were also braced for bad news from Chinese economic data due later in the session.
MSCI's broadest index of Asia-Pacific shares outside Japan firmed 0.3 percent, after shedding 2.7 percent last week to hit a two-year low. Japan's Nikkei rose 1.2 percent, having lost 2.1 percent last week even as a weak yen offered some support to exporters.
US markets bounce back
US stocks ended sharply higher Friday, but all three major benchmarks still booked another week of losses, as investors assessed the scope for further downside and the Federal Reserve’s ability to get inflation under control without sending the economy into a tailspin. Relief at signs of peaking inflation vied with fears that policy tightening by the Federal Reserve could tilt the economy into recession.
The Dow Jones Industrial Average fell for a seventh straight week, its longest losing streak since July 2001. S&P and Nasdaq also fell for the sixth straight week, their worst losing streak in more than 9 years.
For the week, the Dow fell 2.1 percent, the S&P 500 slid 2.4 percent and the Nasdaq dropped 2.8 percent.
US Fed chairman warning
Federal Reserve Chairman Jerome Powell warned that the central bank’s ability to tighten policy without sending the economy into a steep downturn wasn’t solely up to policy makers.
The University of Michigan’s gauge of consumer sentiment fell to 59.1 in May from a final April reading of 65.2, its lowest level in more than 10 years. Economists were expecting a print of 64.1.
The yield on the US 10-year note rose 11.7 basis points Friday to 2.932 percent.
Adani Group to acquire Holcim India assets for $10.5 bn
Adani Group has entered into definitive agreements to acquire Swiss group Holcim's entire stake in two Indian cement companies Ambuja Cements Ltd. and ACC Ltd. The value for the Holcim stake and open offer consideration for Ambuja Cements and ACC is nearly $10.5 billion, which makes this the largest ever acquisition by Adani Group.
The Adani Group will acquire 63.1 per cent of Ambuja Cements Ltd along with related assets. Ambuja's local subsidiaries include ACC Ltd, which is also publicly traded.
China cuts loan interest rates further
China on Sunday did allow a further cut in mortgage loan interest rates for some home buyers and there was talk the central bank might cut its medium-term lending rate on Monday by 10 basis points.
China reports drop in retail sales, industrial production
China reported a drop in retail sales and industrial production in April — far worse than analysts had expected. Retail sales fell by 11.1 percent in April from a year ago, more than the 6.1 percent decline predicted in a Reuters poll.
Industrial production dropped by 2.9 percent in April from a year ago, in contrast with expectations for a slight increase of 0.4 percent.
Fixed-asset investment for the first four months of the year rose by 6.8 percent from a year ago, slightly missing expectations of 7 percent growth. Investment in real estate declined by 2.7 percent, while that in manufacturing rose by 12.2 percent and that in infrastructure rose by 6.5 percent.
Oil prices up
Oil prices were on the rise as US gasoline prices reached a record high, China looked ready to ease pandemic restrictions and investors worried supplies will tighten if the European Union bans Russian oil. Brent was quoted 73 cents higher at $112.28, while US crude rose 79 cents to $111.28.
RBI to raise rates again in June: Reuters poll
The Reserve Bank of India will follow its surprise May rate rise with another hike at its meeting next month, according to a majority of analysts polled by Reuters who were exceptionally split on the size of the move.
Futile to blame central banks for repo rate hikes: SBI Ecowrap
Inflation continues to be a bugbear and it looks unlikely that it will correct anytime soon. The latest inflation numbers, however, reveal that while in the rural areas, the impact has been disproportionately higher for food prices, in urban areas it is disproportionately higher as far as fuel price impact and pass through is concerned since the war began.
Against the continued increase in inflation, it is now almost certain that RBI will raise rates in forthcoming June and August policy and will take it to pre-pandemic level of 5.15 percent by August. However, the important challenge facing the central bank remains whether inflation will tread down meaningfully because of such rate hikes if war related disruptions do not subside quickly.
Three stocks under F&O ban on NSE
Three stocks - GNFC, Indiabulls Housing Finance, and Punjab National Bank - are under the F&O ban for May 16.
Results today
The following companies will release quarterly earnings today: Bharat Forge, MCX India, Ami Organics, Century Plyboards, Dodla Dairy, Fino Payments Bank, Glaxosmithkline Pharmaceuticals, Greenply Industries, GRM Overseas, Max Ventures and Industries, Nava Bharat Ventures, Omkar Speciality Chemicals, RateGain Travel Technologies, Raymond, Shankara Building Products, Uttam Sugar Mills, and VIP Industries.
(With inputs from Reuters)
