Trends on SGX Nifty indicate a gap-down opening for the index in India with a 159-points loss. The Nifty futures were trading at 17,448 on the Singaporean Exchange Wall Street ended sharply lower on Thursday and the S&P 500 posted its worst month since the onset of the global health crisis, following a tumultuous month and quarter wracked by concerns over COVID-19, inflation fears and budget wrangling in Washington.
The Dow Jones Industrial Average fell 546.8 points, or 1.59 percent, to 33,843.92, the S&P 500 lost 51.92 points, or 1.19 percent, to 4,307.54 and the Nasdaq Composite dropped 63.86 points, or 0.44 percent, to 14,448.58. The Nasdaq Composite was off 5.3 percent, its worst September in a decade.
Stock markets likely to open lower
Indian markets could open lower, in line with negative Asian markets today and negative US markets on Thursday, said Deepak Jasani, Head-Retail, HDFC Securities.
"Nifty is expected to open negative at 17430 , down by almost 200 points. Nifty is opening below its support, this is a bearish sign. Nifty now has support in the 17250-17300 range and will face resistance in the 17600-17620 range. Traders can consider buy on dips with strict stop-loss as a strategy as long as Nifty is trading above 17250," said Gaurav Udani, CEO and Founder, ThincRedBlu Securities.
Mohit Nigam, Head - PMS, Hem Securities said, "Indian equity markets are expected to begin October series with a gap-down. Trends on SGX Nifty suggest a fall of nearly a percent, taking it below 17,500 levels. This comes after US equity markets witnessed a massive selloff last night, even after confirmation that the House passed a nine-week spending bill to avert a US government shutdown."
As investors brace for the Fed to shut down its stimulus in near time, fears are adding up regarding slow economic growth, inflation hitting back, supply-chain concerns, a global energy shortage and regulatory risks arising from China. It shall be ideal for investors to avoid any risky standoffs and safer bets could possibly be the right choice, Nigam said.
On technical front, Nifty50 could possibly break support levels of 17,600 and 17,500 in early trade and the new immediate support shall lie near 17,400 levels. Resistance could be seen around 17,700, Nigam added.
Nifty closed down for the third consecutive session on September 30 to close the quarter with gains of 12 percent. At close the Nifty was down 0.53 percent. or 93 points at 17,618.
Nifty has fallen for three consecutive sessions – the longest streak in almost two months, said Jasani. While the Nifty has not fallen with deep cuts and recoveries have been witnessed post intra day selloffs, the fact that the Nifty fell for three straight sessions is a bit unnerving. 17,576-17,608 is the support band for the Nifty in the near term. A breach of this band could take it to 17,355, post which a larger fall may ensue. On rises, 17,781-17,802 could act as a resistance, Jasani added.
Data to watch out for: Markit India Manufacturing PMI for September at 10.30 AM
Asian shares slip in early trade
Shares in Asia-Pacific slipped in Friday morning trade following an overnight drop on Wall Street. Australian stocks led losses regionally, with the S&P/ASX 200 falling 2.23 percent. In Japan, the Nikkei 225 fell 1.41 percent while the Topix index shed 1.8 percent.
Markets in Hong Kong are closed for a holiday on Friday, while those in mainland China are closed for the Golden Week holiday from Friday till October 7.
'Inflation remains high'
Congress voted through a short-term spending bill to keep the U.S. federal government running through early December, acting with only hours remaining before a partial shutdown. Congress has yet to raise the federal debt ceiling though.
Investors were also digesting fresh comments from Fed Chairman Jerome Powell, on inflation remaining high for the time being due to supply bottlenecks as the economy recovers from the pandemic, as he testified to a House panel on COVID relief, along with Treasury Secretary Janet Yellen.
Central Banks of Czechoslovakia, Mexico and Colombia raised rates by 75 bps (to 1.5 percent), 25 bps and 25 bps respectively.
Oil prices decline
Oil futures were little changed on Thursday as reports China was prepared to buy more oil and other energy supplies to meet growing demand offset price pressure from an unexpected rise in US crude inventories and a strong dollar.
Brent futures for November delivery fell 12 cents, or 0.2 percent, to settle at $78.52 a barrel, while US West Texas Intermediate (WTI) crude rose 20 cents, or 0.3 percent, to settle at $75.03.
Domestic natural gas price hiked
The Indian government increased the domestic price of natural gas for the second half of the ongoing fiscal, tracking the global surge in energy costs. Gas under the administrative price mechanism will cost 62 percent higher, at $2.9 per metric million British thermal units, for October 2021-March 2022
Fiscal deficit at 31%
The Centre's fiscal deficit for April-August came in at Rs 4.7 lakh crore, or 31 percent of the full-year budget estimate, compared with 109 percent for the same period last year, official data showed on September 30.
Finance Minister Nirmala Sitharaman had budgeted a fiscal deficit target of Rs 15.07 lakh crore, or 6.8 percent of nominal gross domestic product, for FY22. The fiscal deficit for FY21 was revised to Rs 18.49 lakh crore, or 9.5 percent of GDP, from a budget target of 7.96 lakh crore, or 3.5 percent of GDP.
Sebi extends deadline for annual compliance audit
Markets regulator Sebi on Thursday extended the deadline for investment advisers to conduct the annual compliance audit for the financial year ended March 31. The timeline for compliance with the requirements has been extended by three months, Sebi said in a circular.
For the financial year ending March 31, 2021, the investment advisers (IA) are now required to conduct the annual compliance audit by December 31, 2021.
Eight core sectors post 11.6% growth
Eight core industries, including coal, crude oil, and steel, posted a growth of 11.6 percent in August on a yearly basis, as per government data released on Thursday. The eight core industries -- coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity -- comprise 40.27 percent of the weight of items included in the Index of Industrial Production (IIP).
Forex up in June quarter
The country's foreign exchange reserves in nominal terms, including valuation effects, increased by $34.1 billion during the June quarter compared to $27.9 billion in the year-ago period, RBI data showed on Thursday.
The valuation gain, reflecting the depreciation of the US dollar against major currencies and increase in gold prices, amounted to $2.2 billion during the April-June 2021 period. In the year-ago period, the same was at $8 billion.
Japan's factory activity slowest in September
Japan’s factory activity grew at the slowest rate in seven months in September as overall output and new orders shrank due to the fallout from the coronavirus pandemic, a survey showed on Friday.
The final au Jibun Bank Japan Manufacturing Purchasing Managers’ Index (PMI) in September slipped to 51.5 on a seasonally adjusted basis from 52.7 in the previous month.
FII, DII data
Foreign institutional investors (FIIs) net sold shares worth Rs 2,225.60 crore, while domestic institutional investors (DIIs) net bought shares worth Rs 97.18 crore in the Indian equity market on September 30, as per provisional data available on NSE.
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