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Published on 22/09/2020 10:09:57 AM | Source: HDFC Securities Ltd

Markets could open flat despite mildly negative Asian markets and negative US markets on Monday - HDFC Securities

Posted in Market Outlook| #Market Outlook #HDFC Securities

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Markets could open flat despite mildly negative Asian markets and negative US markets on Monday HDFC Securities

Indian markets could open flat despite mildly lower Asian markets today and negative US markets on Monday. U.S. stocks suffered a sharp selloff on Monday but avoided a much uglier loss for the main benchmarks, as investors contended with the COVID-19 trajectory in Europe and a lack of progress toward another round of fiscal stimulus out of Washington.

Major global banks also faced pressure, after weekend news reports claimed that lenders continued doing business with customers suspected of illicit activity and wrongdoing.

Stocks ended lower to start the week but it could have been worse, as a late-session rally helped to mitigate some of the day’s worst selling. Meanwhile, tensions between the U.S. and China keep escalating.

China’s Ministry of Commerce released long-awaited provisions on its so-called “unreliable entity list,” a day after the U.S. announced a ban on WeChat and TikTok.

JP Morgan has opted not to include India's government bonds in one of its flagship emerging market indexes after investors cited ongoing problems with capital controls, custody and settlement and other operational snags. "We will continue to monitor the development and progress of the FAR regime," saying it remained "off-index" but "under review for inclusion" said J Morgan.It is the largest "off-index" government bond market with the scale to reach a 10% allocation of JP Morgan's GBI-EM Global Diversified index, the bank estimates.

Gold slumped over 2% on Monday, sliding to its lowest level in more than a month, as a broader market sell-off driven by uncertainty over more U.S. fiscal stimulus pressured the precious complex along with a stronger dollar. Silver plunged 8.3% to $24.53, its lowest level in over a month. Oil prices plunged about 4.4% on Monday, weakening as rising coronavirus cases stoked worries about global demand, and a potential return of Libyan production bolstered oversupply fears.

Asian shares opened weaker on Tuesday on concerns about new pandemic lockdowns in Europe and after reports about financial institutions allegedly moving illicit funds hurt global banking stocks.

Indian equity benchmark indices ended the first day of the week with deep cuts, in-line with the soft global sentiments. Nifty fell almost one way post 1215 pm on Sept 21 after European markets opened with deep cuts. At close Nifty ended 254 points, or 2.21 percent, lower at 11,250.55.

Indian markets fell the most among its Asian peers. Nifty after making a downgap on Sept 17, has seen acceleration in downtrend on Sept 21. It has support in the 11110-11185 band. A short term reversal is possible from this band.

 

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