Markets may remain under pressure in early trade tracking weak peers

Previous day’s retreat in the second half of the session suggests that Indian markets may remain under pressure in today’s early session of trade. Further, weakness among global bourses would also drive the Indian markets down. SGX Nifty too is trailing down 0.4 per cent at 10387 at 7:17 hours IST. 

Asian markets are no exception and opened on a weaker note and are heading southwards led by the pessimistic closure in the US markets. Apart from the inflation data and the US Secretary of State’s termination, the tough trade calls by the Trump regime on China spawned negative sentiments. Japan’s benchmark Nikkei 225 is down by 0.88 per cent, Hong Kong’s Hang Seng is down by 1.1 per cent and Shanghai Composite is marginally down by 0.25 per cent at 7:13 hours IST.  

Indian stock markets opened on a negative note tracking subdued global cues and ahead of the release of inflation and retail sales numbers of the US economy. However, markets recovered immediately and moved higher till the afternoon session, driven by the strong domestic macros of lower inflation and higher factory output data. The revival in banks, specifically the PSU banks, led the move. However, markets were refrained from gaining ground and retreated yet again because of a sharp fall in the IT heavyweights. Thereby, Nifty and Sensex closed almost flat at 10,426.85 and 33,856.78, respectively. However, broader markets witnessed a sharp recovery and outperformed the benchmarks, gaining over one per cent each. 

The US markets too witnessed correction led by the technology and finance frontliners. Due to this, Nasdaq was off its all-time high levels and dropped one per cent, shedding 77 points to close at 7511. The markets had opened higher tracking softer growth in the consumer prices as compared to the previous month. The CPI and core inflation rose 0.2 per cent each from the previous month at 2.2 per cent and 1.8 per cent, respectively. Ultimately, Dow Jones too turned around after the morning session and closed down 0.68 per cent at 25,007 and S&P500 shed 17.7 points to finish at 2765.3. The retail sales data would drive the markets in today’s trade on expectations of a marginal growth of 0.3 per cent after the sudden fall last month . 

The European markets too tumbled sharply after the tepid growth in the US inflation drove the European currencies higher against the US dollar. Even the news that US President sacked the Secretary of State, Rex Tillerson, drove the markets. Germany’s DAX lost 1.6 per cent, CAC 40 of France shed 33.92 points and  FTSE 100 of UK too ended one per cent down.