The market is expected to open on a cautious note as trends on the SGX Nifty indicate a flat opening for the index in India.
Indian markets could open flat in line with mixed Asian markets today and despite negative US markets on Friday, said Deepak Jasani, Head-Retail, HDFC Securities.
Gaurav Udani, Founder and CEO of ThincRedBlu Securities said, "Nifty is expected to open flat around Friday's close at 17,200. Since the last few days, Nifty has been volatile and have been trading in a big range. Overall bias in Nifty is negative and it may test its support level of 16,800 in the next few trading sessions."
Nifty broke a two day winning streak on Dec 03 and ended lower. At close, Nifty was down 1.18% or 205 points at 17196.7. In the process India was the worst performing market in the Asian region.
Nifty corrected after rising for two days going against the global trend. While sell on rallies (especially in largecaps) continues, the broader market seems to have done well. On a weekly basis, Nifty gained 1 percent after two weeks of losses.
On weekly charts a doji like formation suggests that the recent downmove may not continue and we may see some consolidation/correction for the next few sessions. On upmoves 175,36-17,613 could act as a resistance while 16,722-16,782 could act as a support on a weekly basis.
US markets close lower
US stock benchmarks ended lower Friday, relinquishing solid opening gains and notching another week of losses, as investors reassessed a weaker-than-expected November jobs report as unlikely to stay the hand of a Federal Reserve that seems intent on tamping down inflation.
For the week, all three major indexes booked losses, with the Dow falling 0.9 percent, the S&P 500 sliding 1.2 percent, and the Nasdaq dropping 2.6 percent,. That Dow notched a fourth straight week of losses, while the S&P 500 and Nasdaq each closed with weekly declines for the second week in a row. The Russell 2000 index saw a weekly decline of 3.9 percent.
A report from the Labor Department showed that a mere 210,000 new jobs were created in the US in November, well below estimates from economists polled by The Wall Street Journal for a gain of 573,000 new jobs. The unemployment rate dropped to a 21 month low of 4.2 percent, its lowest since February 2020, and wages increased.
The final November reading of IHS Markit’s US purchasing managers index geared to the service sector was 58 versus an initial reading of 57. The more closely watched services reading from the Institute for Supply Management rose to 69.1 in November from 66.7, above forecasts.
IMF likely to lower growth estimates
The International Monetary Fund is likely to lower its global economic growth estimates due to the new Omicron variant of the coronavirus, the global lender's chief said
Evergrande Group shares tumble
Shares of China Evergrande Group tumbled 12 percent to an 11-year low on Monday after the firm said there was no guarantee it would have enough funds to meet debt repayments, prompting Chinese authorities to summon its chairman. The shares fell as a 30-day grace period on a coupon payment of $82.5 million due on November 6 comes to an end on Monday.
Asian stocks fall
Asian stocks fell as investors weighed uncertainties about the omicron variant and looked to U.S. inflation data amid the Federal Reserve’s hawkish tilt.
Omicron remained a concern as the variant spread to about one-third of US states, though there were reports from South Africa that cases there only had mild symptoms, Reuters said. Early trade was cautious as MSCI's broadest index of Asia-Pacific shares outside Japan inched down 0.4 percent.
Japan's Nikkei eased 0.6 percent, even as the government considered raising its economic growth forecast to account for a record $490 billion stimulus package. Chinese blue chips managed a 0.7 percent gain after state media quoted Premier Li Keqiang as saying Beijing will cut banks' reserve requirement ratios (RRR) "in a timely way".
Forex reserves
Foreign exchange reserves declined by $2.713 billion to $637.687 billion in the week to November 26, RBI data showed. In the previous week ended November 19, the reserves had increased by $289 million to $640.401 billion. It touched a lifetime high of $642.453 billion in the week ended September 3, 2021.
In the reporting week ended November 26, the dip in the foreign exchange reserves was on account of a decline in foreign currency assets (FCA), a major component of the overall reserves and gold reserves, Reserve Bank of India's (RBI) weekly data released on Friday showed.
Gold reserves were down by $1.566 billion to $38.825 billion in the reporting week, the data showed.
RBI MPC may keep interest rates on hold, say experts
The Monetary Policy Committee of the Reserve Bank of India is meeting on December 6-8, 2021 to decide on policy action. The monetary policy review along with the release of key macro economic data points will steer the key equity indices this week.
It is widely expected that RBI's MPC will maintain a status-quo in the key lending rates, according to news reports. At present, the MPC of the central bank has maintained the repo rate, or short-term lending rate, for commercial banks at 4 percent.
(With inputs from Reuters)
