Markets May Open on a Weak Note

Indian equity market continued to spiral down and remained bearish for the fourth-straight session on Thursday after China pegged the Yuan lower for the eighth day in a row and Asia witnessed widespread economic disruption.The Sensex closed below the 25,000-mark, down 554.50 points or 2.2% at 24851.83, and the Nifty was down 172.70 points or 2.2% at 7568.30. Meanwhile, the broader markets underperformed, the benchmarks with BSE Midcap and Smallcap indices slumping between 2.5%-3% each. All the sectorial indices closed in red. The rupee ended 11 paise down at over a 3-week low of 66.93 against the US dollar. U.S. equity markets tumbled on Thursday to close distinctively lower attributed to worries about the health of the Chinese economy and a continued slide in commodity prices. The Dow Jones Industrial Average tumbled 392 points, or 2.32% to 16513 for its biggest loss in three months. The S&P 500 dropped 47 points, or 2.37% to 1943, while the Nasdaq Composite lost 145 points, or 3.03% to 4689. European markets extended their downward rally as commodity stocks came under intense pressure due to worries over the aftereffect of China’s slower economic growth, which could have an impact on the industry.

The Stoxx Europe 600 index slumped 2.2% to 346.51. Germany’s DAX 30 index slumped 2.3% to 9,979.85, sliding below 10,000 for the first time since mid-October. The U.K.’s FTSE 100 index gave up 2% to 5,954.08 due to the dip in mining stocks. France’s CAC 40 index dropped 3.1% to 4,403.58, and Italy’s FTSE MIB fell 2.7% to 20,422.39.

Crude oil has fallen again to lowest levels in more than 11 years as turmoil in China continued to raise the risk for a slowdown in energy demand. WTI crude shed 70 cents, or 2.1% to settle at USD 33.27 a barrel as against intraday low of USD 32.10. Brent crude fell 48 cents, or 1.4%, to USD 33.75 on London’s ICE Futures exchange.

Asian stocks are trying to stabilize on Friday after China opened in positive territory but some major markets were in the red. Australia’s S&P/ASX 200 Index lost 0.48% and New Zealand’s S&P/NZX 50 Index declined 1.25%. South Korea’s Kospi index slipped 0.14% whereas Japan’s NIKKEI 225 index advanced 0.38%. While on domestic front, A SGX Nifty 50 index future for January Series traded up 7.5 points at 7,580. Indian markets may open on a weak note due to bearish trend seen in the Asian market.