Indian equity benchmarks opened in the red on Tuesday, breaking a four-day winning streak on concerns about the risk of a global recession, poor economic data across the world weighed down Wall Street, and other Asian stocks that weakened. trend continued.
The 30-share BSE Sensex opened down over 100 points, while the broader NSE Nifty was down nearly 0.4 per cent in early Tuesday.
In the previous session, the BSE Sensex closed 545 points higher at 58,116, while the NSE Nifty closed 182 points higher at 17,340.
Analysts expect continued strong capital inflows from foreign institutional investors (FIIs) in the recent past and a rally in Indian equities.
“There is a possibility that the market could move on some positive catalysts such as US Treasury yield falling in overnight trades, strong July GST collections, and foreign investors continuing to invest in local equities over the past few weeks. Research at Mehta Equities Prashant Taapsee, Senior Vice President of
“In fact, on Monday, FIIs bought shares worth Rs 2,321 crore and there were also buyers worth Rs 1,046 crore in Friday’s trade. Better-than-expected Q1 earnings from India Inc are likely to boost sentiments, providing relief to China The Covid curbs are in place, and the Federal Reserve is expected to ease going forward,” he said.
But oil prices and stocks in Asia continued to tumble on Tuesday, hitting Wall Street overnight as investors worried about global demand following weak manufacturing data in several countries.
“Data releases over the past 24 hours provide further evidence of the slowing global economy, as reported by Reuters,” National Australia Bank strategist Rodrigo Catril wrote in a note to clients.
“Signs of a slowdown are forming” in the United States, while “China’s reopening activity is over,” he said.
All eyes will also be on the outcome of RBI’s rate-setting meeting on Friday.
A Reuters poll showed Rate hike was almost certain on FridayBut there was no consensus on the size of the rate hike.
“We expect the RBI to hike the repo rate by 25 bps this time. This will bring it down to the pre-covid level of 5.15 per cent. A hike of 25 bps would indicate that inflation is peaking and will not go higher though significantly. 50 Any aggressive move by the BPS would indicate that the inflation peak is yet to be achieved and hence could send a different signal to the market, said Madan Sabnavis, Chief Economist, Bank of Baroda.
“Under the current situation of easing global prices, we do not expect any change in the forecast for inflation or GDP,” he said.
But on the global front, the week began with weak factory activity in China, Europe and the United States, with the US declining to its lowest level since August 2020.
Brent futures fell to $99.74 on Tuesday after a loss of nearly $4 overnight. US West Texas Intermediate futures also edged lower to $93.67, extending Monday’s decline of nearly $5.
US House of Representatives Speaker Nancy Pelosi also spoke about escalating Sino-US tensions to begin a visit to Taiwan against objections from China, which treats the self-governing island as a separate province.
US E-mini stock futures pointed to a 0.31 percent lower restart for the S&P 500, falling 0.28 percent overnight.
MSCI’s broadest index of Asia-Pacific shares fell 0.8 per cent, Chinese blue chips 1.06 per cent and Hong Kong’s Hang Seng 1.1 per cent.
Australian equities fell amid an uncertain outlook for commodity demand – which also weighed on crude oil prices – while the local dollar was hovering near its highest level against its US counterpart since mid-June, with the central bank widening It was expected to pay a third consecutive half-point interest rate hike later in the day.
Australian and South Korean equity benchmarks lost around 0.3 per cent, while Japan’s Nikkei lost 1.17 per cent.