Markets may open flat to negative, but may see some recovery

Stock markets witnessed a free fall making lower tops and lower bottoms amid continued profit booking and a dovish move by the RBI Governor. Cement sector dragged the indices down. Nifty closed below 8600 mark at 8575 levels and Sensex shed 310 points at 27775. India retail inflation is likely to have increased to 5.9 per cent in July because of higher food prices.

US markets closed lower with fall in oil prices by nearly 2.5 per cent. Dollar too weakened with no clarity by FED on interest rate hike anytime soon. Dow remained 0.2 per cent down and S&P500 fell 0.3 per cent. Nasdaq too slipped 0.4 per cent.

European markets ended lower with worse than expected corporate earnings. Specifically the electric utility company EOAN slipped more than 7 per cent post results, dragging the markets to close lower. Drop in oil led to a fall in Energy sector stocks. DAX closed marginally down by 0.4 per cent and CAC40 too closed lower with 0.36 per cent losses. However, FTSE100 continued to be upbeat closing 0.22 per cent higher, led by stock specific gains.

Asian markets are trading in the mix, where indices are reacting to the negative closing in the US. Investors are cautious ahead of the China data to be released during the week. Japan’s Nikkei 225 is 0.2 per cent down. Hang Seng is marginally up with 0.22 per cent gains. China’s Shanghai Composite remains flat to negative with 0.1 per cent losses. Australia’s S&P/ASX 200 Index has tumbled drastically with 1 per cent loss. New Zealand’s S&P/NZX 50 is absolutely flat. South Korea’s KOSPI is 0.3 per cent down.

SGX Nifty is trading up at 8607 levels. We may see some more downside in the markets, but followed by recovery during the session. We have many company results on the cards out of which Bank of Baroda is to be watched out for.