Market Likely To Under Pressure

Indian equities indices extended losses for the second trading session and registered the biggest fall since January 6, 2015 due to huge sell-off by FIIs on concerns over GST and other reforms, the nervousness surrounding the March quarter earnings season, which has failed to surprise on the upside as yet and the possibility of a second consecutive year of weak monsoon. The Sensex dropped 2.63%, or 722.77 points, to 26,717.37 and the Nifty index ended at 8,097, down 227.8 points, or 2.74% in its second-worst single-day fall in 20 months. The BSE Midcap Index closed 3.28% lower and the BSE Smallcap Index declined 3.12%.

The cut in earnings estimates by leading research houses for Nifty and Sensex companies for FY16 between 2-4% on the back of less visibility of earnings growth and some of market expert believe it may have led to index based basket selling on Wednesday.

U.S. stocks fell on Wednesday after Federal Reserve Chair Janet Yellen warned of high stock market valuations contributing to weakness in U.S. equities. Ms. Yellen made the remarks in a conversation with International Monetary Fund Managing Director Christine Lagarde, who asked the central bank chief about the possibility that the Fed’s rock-bottom interest-rate policy was leading to bubbles in financial markets. The Dow Jones Industrial Average briefly turned negative after dropping more than 170 points at session lows, closed 86.22 points, or 0.5%, lower at 17,841.98. The Nasdaq Composite lost 19.68 points, or 0.4%, to 4,919.64. The S&P 500 closed 9.30 points, or 0.5%, lower at 2,080.16.

European stocks were mixed Wednesday. Germany’s DAX index gained 0.2% and France’s CAC 40 rose 0.2%. The Stoxx Europe 600 index declined 0.6%. The FTSE 100 rose 0.1%, at 6,933.74.

Asian stocks continued to head south early Thursday following declines in U.S. equities, growth worries in Australia and jitters over tighter margin trading rules in China. Japan's Nikkei 225, which reopens with down 1% in its first trading session this week after being shuttered for the Golden Week holiday since Monday, touched a one-month low from the get-go. South Korea’s Kospi index fell 1.63%. New Zealand’s NZX 50 Index declined 0.92%. Australia’s S&P/ASX 200 Index lost 0.8% after sliding 2.3% on Wednesday, the biggest drop in two years. China's Shanghai Composite index dived 1.4% in early trade, due to persisting worries over further government measures curbing speculation and the possibility that new stock listings may sap funds from existing equities.

SGX Nifty is trading lower by 19 points. Indian market is likely to open flat. Alembic Ltd, BASF, Birla Corporation, Blue Dart Express, Great Eastern Shipping, Goodyear India, Hero Motocorp, Goodyear India, Jindal Saw, Lancor Holdings, Merck, Sintex, Sutlej Textiles, Talwalkars, Titan, United Bank, Visaka Industries And Z.F.Steering Gear  would be reporting fourth quarter earnings today.