Markets may act cautious on the day of IIP and CPI numbers release

Indian equities market closed lower on Monday despite sharp recovery after major loss in early trade tracking weakness in Rupee after China devalued its currency against the Dollar and investors turned cautious ahead of December a earnings which is expected to be tepid. The rupee closed at 66.81 a dollar, down 0.26% from its previous close of 66.64. Meanwhile, the broader markets also lost ground substantially with BSE Midcap and Smallcap indices slumping 0.95% and 0.47% respectively. On the sectoral front, pharma, IT and banks faced severe burns by 1.62%, 1.51%, 0.78% respectively.

For the most part of the day, U.S. stock markets traded with a negative bias, however in a last-minute its comeback to close slightly higher on Monday. The energy sector hit poorly due to crude oil prices continued to fell down and sent crude prices to levels last seen in 2003. The Dow added 52.12 points, or 0.3%, to 16,398.57. The S&P 500 index rose 1.64 points, or 0.1%, to 1,923.67. The Nasdaq fell 5.64 points, or 0.1%, to 4,637.99, falling for the eighth consecutive session.

European stocks markets ended in negative territory due to concern over lower commodities prices and the continued sell-off in Chinese equities. The Stoxx Europe 600 index dropped 0.3% to close at 340.23, declining for a fourth straight session. Germany’s DAX 30 index down 0.3%, to 9,825.07, France’s CAC 40 index fell 0.5% to 4,312.74, while the U.K.’s FTSE 100 index fell 0.7% to 5,871.83.

Crude oil prices continued to fall. WTI crude fall USD 1.50 to USD 31.37 a barrel - its lowest level since December 2003. Brent price slumped 6.6% to USD 31.31 a barrel.

Asian equities opened mixed on Tuesday while oil extended declines to a seventh day. Japan’s Nikkei 225 index fell 2% while South Korea’s Kospi index was up by 0.26%. Australia’s S&P/ASX 200 Index gain 0.23%; and New Zealand’s S&P/NZX 50 Index advanced 0.47%. The Shanghai Composite Index wavered between positive and negative territory and traded at 0.23% down.

While on domestic front, A SGX Nifty 50 index future for January Series traded down 19 points at 7,566. Indian markets may open flat. Investors keep eye on TCS result release today. The government will issue IIP and CPI data on 12 January (Today) after 5.30pm.