Thin Volumes In Markets May Dampen New Year Eve Mood

Indian equity markets witnessed consolidation on Tuesday, as equity benchmarks started the session on a positive note but wiped out those gains and closed on a flat note with thin volumes due to year-end holidays. The Sensex rose 45.35 points to 26079.48 and the Nifty advanced 3.80 points to 7928.95. Among the sectoral indices on BSE, auto and consumer durable indices came out as highest gainers with 0.56% and 0.53% rise respectively which helped the benchmark index to close in marginal positive. Among the broader markets front, the BSE Mid-Cap index rose 0.42% and BSE Small-Cap fell 0.13%.

U.S. stocks closed more than 1% higher in light volume trade on Tuesday, as a rebound in oil prices and other commodity prices continued. The Dow Jones industrial average rose 192.71 points, or 1.1%, to 17,720.98. The S&P 500 index gained 21.86 points, or 1.1%, to 2,078.36. The Nasdaq composite added 66.95 points, or 1.3%, to 5,107.94.

WTI crude price rallied 2.9% to finish at USD 37.87 a barrel, recovering after a slump Monday. Brent crude gained USD 1.17, or 3.2%, to close at USD 37.79 a barrel in London.

European stocks gained for a second straight session on Tuesday, driven by rally in the banking sector although weaker in the mining sector which has somehow put a block on the rise of British market. The Stoxx Europe 600 Index added 1.1% to 369.68. Germany's DAX rose 1.94%, while France's CAC 40 gained 1.8%. Britain's FTSE 100 rose 0.96%.

Shares in Asia were seen mixed early on Wednesday with Hong Kong and South Korea's markets falling into the red. Japan's Nikkei 225 was up 0.33% while the Australian market traded in the green, with the S&P/ASX 200 Index up 37 points, or 0.70%, at 5,304. South Korea's KOSPI lost its momentum from a higher finish in the previous session. And the index was down 5.5 points, or 0.3%, at 1,961 in mid-morning trade.  Chinese markets had fluctuated between positive and negative and Shanghai Composite index was up 0.17% at 3,570.

A SGX Nifty 50 index future for December Series traded up 3 points at 7,941. Indian market may open in flat tracking SGX Nifty. Investors will remain cautious ahead of F&O expiry of the December series, scheduled for December 31. We believe thin volumes may be seen on the exchange's remaining days of the week due to year-end holidays.