Expect flat opening; Metal stocks may remain in focus

Indian stock markets ended higher, snapping three days of weakness on Thursday amid a strong momentum trend in global markets after oil rebounded and speculation that the US Federal Reserve might opt to not raise interest rates this year. The Sensex was up 115.11 points or 0.5% at 24338.43; and the Nifty was up 42.20 points or 0.6% at 7404, above the psychological support level of 7,400. However, the broader markets faced selling pressure with the BSE small-cap index falling by 1.25 %; while mid-cap index dropped by 1.74%. Pharma stocks edged lower after the United States government reportedly made it mandatory for Active Pharmaceutical Ingredients (API) to be manufactured locally as it will significantly impact Indian drug exports.

U.S. stocks registered modest gains Thursday despite another drop in oil prices ahead of Friday’s jobs report, which some fear could show weakness in what has been a bright spot of the U.S. economy. The Dow Jones Industrial Average climbed 79.92 points, or 0.5%, to 16416.58. The S&P 500 added 2.92, or 0.2%, to 1915.45, and the Nasdaq Composite rose 5.32, or 0.1%, to 4509.56.

Oil fell around 1.5% in volatile trading on Thursday, as doubts over the potential for a production cut among major producers, offset earlier support from weakness in the U.S. dollar. WTI crude ended lower, down 56 cents, or 1.7%, at USD 31.72 after swinging between USD 31.53 and USD 33.60. Brent crude settled 1.6%, or 58 cents, lower at USD 34.46 a barrel, after trading between USD 34.15 and USD 35.84.

Most European stocks turned lower Thursday, after the European Commission marginally downgraded its Euro area growth and inflation projections due to risks from the slowdown in China and other emerging markets, falling oil prices and the weak global trade escalate. After a choppy session, the Stoxx Europe 600 ended down 0.2% at 328.76. In Frankfurt, the DAX 30 was dragged down 0.4% to 9,393.36. France's CAC closed up just above the flat line at 4,228.53. The U.K’s FTSE 100 sped ahead following a sharp jump in mining stocks, closing 1.1% up at 5,898.76.

Most Asian markets are trading lower on Friday despite a positive finish on Wall Street overnight. Japanese shares dropped amid strengthening Yen; Japan’s NIKKEI 225 index lost 1.26%, heading for a 4.4% weekly loss. South Korea’s Kospi index traded flatly. Australia’s S&P/ASX 200 Index retreated 0.92%. New Zealand’s benchmark gauge declined 0.1%. Chinese markets opened the session in positive territory; Shanghai composite was up 0.13% as the Central Bank stepped up efforts to ease a cash shortage before mainland markets close for the holidays next week. Hong Kong's Hang Seng index gained 0.94%.

While on domestic front, a SGX Nifty 50 index future for February series traded up 6 points at 7,451. Indian markets are likely to open flat. Metal stocks may remain in focus due to China's plans of cutting steel production capacity by 100 million tonnes to 150 million tonnes over the next five years.