Market likely to open flat

Indian equities indices swung between gains and losses on Monday and ended the trade on a flat note. The mood is quite cautious following Britain's exit from the European Union. The Sensex ended 5 points higher at 26,403 and Nifty rose 6 points to 8,095. The BSE Midcap and Smallcap indices gained 0.8% and 1.5%, respectively. Both these indices over performed the Sensex.

U.S. stocks posted a second sharp daily loss Monday as investors grappled with the fallout from Britain’s historic vote to leave the European Union. The S&P 500 closed 36.87 points lower, a loss of 1.8%, at 2,000.55. The Dow Jones Industrial Average dropped 260.51 points, or 1.5%, to close at 17,140.24. Meanwhile, the Nasdaq Composite lost 113.54 points, or 2.4%, to close at 4,594.44.

European stock markets extended their losses from Friday as the historic BREXIT referendum last week continued to cast a shadow over global financial markets. The British pound, which last week plunged to its lowest level since 1985, continued to fall as traders expected the British economy would take a hit. The Stoxx Europe 600 index lost 4.1% to 308.75. The U.K.’s FTSE 100 index slid 2.6% to 5,982.20 on Monday, with the banks posting some of the biggest losses. Germany’s DAX 30 index fell 3% to 9,268.66, while France’s CAC 40 index also dropped 3% to 3,984.72.

Crude oil prices on Monday continued with their steep decline sparked by the British vote to leave the European Union. The price for Brent crude oil lost 1.7% to start the day in New York at USD 47.60 per barrel. WTI was off 1.6% to open at USD 46.88 per barrel.

Asian markets opened lower on Tuesday however pared losses amid the prospect of stimulus packages in Japan and South Korea. Japan's Nikkei 225 and South Korea’s Kospi indices recovered from heavy initial loss. While Nikkei still is 0.28% down and Kospi is trading flat. Australia’s S&P/ASX 200 and New Zealand’s S&P/NZX 50 Indices are down by 1.24% and 0.24% respectively. Chinese markets opened lower with the Shanghai composite shedding 0.24%.

On the domestic front, A SGX Nifty 50 index future for June series is trading down by 15 points at 8,065. Indian markets are likely to open flat. Going forward, market may remain volatile due to F&O expiry week.