Think global, act local; Indian markets may open weak yet another day

Indian stock markets were flat throughout the day on caution ahead of crucial GDP data. However the final-hour of trade saw a sharp drop, tracking a sell-off in European markets after mixed US economic data raised uncertainty over global growth. The Sensex ended down 329.55 points or 1.3% at 24287.42; and the Nifty closed down 101.85 points or 1.4% at 7387.25. However, the fall in broader markets was less compared to benchmarks; the BSE Midcap and Smallcap indices were down 0.23% and 0.02% respectively.

India's economic growth slowed in the three months ending December, preliminary data from the Central Statistics Office showed on Monday. Gross domestic product rose 7.3% year-on-year Backed by a strong growth in manufacturing and mining sectors. The government also revised the growth rate for the period of July-September (Q2) to 7.7% against the previous of 7.4%. The government, however, expressed confidence and forecast the annual economic growth to accelerate to 7.6% in the fiscal year ending March 2016.

US stocks trimmed sharp losses but still ended broadly lower Monday amid a fresh slide in oil prices below the key $30 per barrel mark; and continued fears about slowing global growth. The Dow Jones Industrial Average fell 177.92 points or 1.1% to 16,027.05. The S&P 500 lost 26.61 points, or 1.4% to 1,853.44. The Nasdaq composite dropped 79.39 points, or 1.8% to 4,283.75.

Oil prices are falling sharply again Monday, with U.S. crude oil falling to USD 1.20, or 3.9%, to close at USD 29.69 a barrel in New York. Brent crude dropped USD 1.18 or 3.5% to close at USD 32.88 a barrel in London.

European stocks fell to a 16-month low on Monday, extending the previous week's hefty losses as investors continued to dump risky assets such as equities. The STOXX Europe 600 banking index, was down 3.6% to 314.36, and was among the top decliners. Germany’s DAX 30 index erased 3.3% to quote 8,979.36. France’s CAC 40 index lost 3.2% to 4,066.31, while the U.K.’s FTSE 100 index skidded 2.7% to 5,689.36.

Markets in Asia were sharply lower on Monday, after another sell-off in U.S. and European stocks overnight. Japan’s NIKKEI 225 index lost 4.4%, relinquishing all the gains it made on Monday. Australia’s S&P/ASX 200 was 2.1% lower and New Zealand’s S&P/NZX 50 was down 1.4%. Many Asian markets remain closed for the Lunar New Year. China and Taiwan are shut for the week, while markets in Hong Kong, Singapore, South Korea, Malaysia and Vietnam are closed for Tuesday.

While on domestic front, a SGX Nifty 50 index future for February series traded down 57 points at 7,317. Indian markets are likely to open weak due to negative global cues. However, downward movement may remain capped following yesterday's robust quarterly GDP data, which came in at 7.3% and also owing to government's forecast that the annual economic growth would accelerate to 7.6% in the fiscal year ending March 2016.