Trends on SGX Nifty indicate a gap-down opening for the index in India, Indian markets could open sharply lower in line with largely negative Asian markets today and deeply negative US markets on Wednesday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
Mohit Nigam, Head - PMS, Hem Securities said, "The American Market ended negative while European market closed positive on the previous trading day. Asian markets are trading negative amid global market. US market fell more than 3 percent yesterday after US Federal Reserve meeting minutes signalled the central bank may raise interest rates sooner than expected. We can see movement in Jet Airways as company stated that Captain Sudhir Gaur has resigned as the Interim CEO. The Reserve Bank of India may defer plans to increase policy rates to the next financial year starting April to avoid a potential hit on the economy, as the rapid spread of the Omicron variant has already led to pandemic curbs in several states that will crimp economic activity.
"On technical front, Nifty's immediate support and resistance can be 17,600 and 18,200 respectively. While for Bank Nifty 37,300 and 38,200 may act as immediate support and resistance," Nigam added.
Nifty rose for the fourth consecutive session on Jan 05, its longest winning streak in over two months. At close Nifty was up 0.67 percent or 120 points at 17925.3. In the process, Nifty was the best performing index in the Asian region.
Nifty rose for the fourth consecutive session; however the advance decline ratio is now only marginally above 1:1 suggesting likelihood of Nifty starting to correct soon under profit taking in largecaps. 17945-18023 could be the resistance in the near term while 17827 could be a support.
Asian shares fall
Stocks in Asia dropped Thursday after a selloff in US technology shares and Treasuries accelerated once Federal Reserve minutes signaled interest-rate hikes may be more aggressive than many had expected.
Asian shares took their cue from overnight losses on Wall Street, said Reuters. MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.95 percent, Australian shares slid 1.53 percent and Japan's Nikkei stock index fell 2.08 percent. Chinese blue-chips fell 1.37 percent as a private sector survey showed China's service sector activity expanded more quickly in December, but continuing COVID-19 outbreaks weighed on the outlook.
US stocks close sharply lower
US stocks finished sharply lower Wednesday after the release of minutes of the Federal Reserve’s last policy gathering on December 14-15, 2021 showed discussion around a potentially faster pace of shrinking the central bank’s massive balance sheet and raising rates. Minutes revealed robust talk among some Fed officials around the central bank potentially moving to raise rates quicker and cutting its current $8.8 trillion sized balance sheet faster than earlier anticipated to help tackle higher costs of living.
The 10-year Treasury yield has surged nearly 20 basis points in the first three trading days of 2021. The yield on the 10-year Treasury note rose 3.7 basis point to 1.703 percent, the highest since April 5, 2021.
The Nasdaq plunged more than 3 percent on Wednesday in its biggest one-day percentage drop since February and the S&P 500 fell the most since November 26, when news of the Omicron variant first hit global markets.
On the economic and policy fronts, a report on private payrolls in the US showed that 807,000 jobs were created in December, higher than forecast for a gain of 375,000. The report comes ahead of the Labor Department's more comprehensive and closely watched nonfarm payrolls data for December on Friday.
Separately, the final reading of the IHS Markit Composite Purchasing Managers' Index - a good gauge of overall economic health, sank to a nine-month low of 53.3 in December from 55.4 in November but was mostly in line from an earlier estimate.
China services sector activity expands
Activity in China's services sector expanded at a faster pace in December amid higher demand and easing inflationary pressure. The Caixin/Markit services Purchasing Managers' Index (PMI) rose to 53.1 in December from 52.1 in November. Caixin's December composite PMI, which includes both manufacturing and services activity, rose to 53.0 from 51.2 the previous month.
Japan PMI drops
The final au Jibun Bank Japan Services Purchasing Managers' Index (PMI) for December dropped to a seasonally adjusted 52.1 from the prior month's 53.0, which was the highest reading since August 2019.
Forex-dollar near five-year high to yen
The dollar hovered near a five-year high to the yen on Thursday, supported by a surge in U.S. Treasury yields on rising bets for a Federal Reserve rate hike by March.
The greenback stood at 116.115 yen, little changed from Wednesday, when it rallied back toward Tuesday's high of 116.355, lifted by more hawkish rhetoric from Fed official and a strong US jobs report.
Icra says Omicron may eat up 40 bps of Q4 GDP growth
The third wave of the pandemic, which has seen a massive spike in infections after the more infectious Omicron variant of the coronavirus appeared, is likely to shave 40 bps off the fourth quarter GDP growth that may print in at 4.5-5 per cent, warns Icra Ratings.
The agency's chief economist Aditi Nayar said given the early indications and the speed with which new infections are being reported, it can be surmised that there could be more mobility restrictions that will impact economic activities, especially in contact-intensive sectors.
However, she has retained the ''full year GDP forecast at 9 percent, with moderate downside risks'', saying anyways Icra's forecast was the lowest among the consensus numbers which vary from 8.5 to 10 percent, with the RBI pegging it at 9.5 percent.
Bitcoin may take market share away from gold: Goldman Sachs
Goldman Sachs said in a research note on Tuesday that Bitcoin would likely take market share away from gold as a "store of value" as digital assets become more widely adopted and that its price could hit $100,000 in five years. Spot gold added 0.5% to $1,822.81 an ounce. US gold futures gained 0.06 percent to $1,815.10 an ounce.
(With additional inputs from Reuters and agencies)
