Trading of Nifty futures on the Singapore stock exchange indicates that the Nifty could open flat to slightly lower at the opening bell. That said, underlying sentiment is expected to remain positive amid continued capital inflows.
Global cues are mixed after European Central Bank (ECB) President Mario Draghi explicitly cited government-bond buying as a possibility for unconventional measures to stimulate the economy and keep inflation from staying too low for too long if the outlook worsens.
Closer home, Finance Minister Arun Jaitley has pitched for a rate cut by the Reserve Bank of India (RBI), saying that lower cost of capital will give a "good fillip" to the economy. He hoped that the central bank will take "the best decision" to help reduce the cost of capital in the corporate sector.
The benchmark indexes Sensex and Nifty erased early losses to end up about half a percent each on Monday as investors reacted positively to earnings reports from SBI and Tata Motors and data showed India's trade deficit for October declined by 6 percent over the previous month.
Asian Markets
Asian stocks are trading mixed as investors await a decision by Japanese Prime Minister Shinzo Abe to postpone the planned consumption tax hike, planned for next October, and face snap elections, after data yesterday showed the economy slipped into a technical recession.
Japan's Nikkei index is rallying 1.6 percent after tumbling 3 percent yesterday, South Korea's Kospi average is gaining 1.1 percent and New Zealand's NZX-50 index is moving up 0.2 percent, while the markets in Australia, China and Hong Kong are subdued.
Crude prices drifted lower in Asian deals ahead of weekly inventory reports from the American Petroleum Institute later in the day and the U.S. Department of Energy Information Administration tomorrow.
U.S. And European Markets
U.S. stocks ended mixed overnight, although the S&P 500 managed to set another closing high, helped by merger & acquisition news and dovish comments from ECB President Draghi. While the Dow and the S&P 500 inched up marginally, the tech-heavy Nasdaq dropped 0.4 percent.
The European markets closed firmly in positive territory on Monday, as a dovish speech by Draghi offset softer-than-expected manufacturing data out of the U.S. and news that Japan unexpectedly fell into a recession last quarter. The German DAX and France's CAC 40 both rose 0.6 percent, while the U.K.'s FTSE 100 added 0.3 percent.
In testimony to the European Parliament, Draghi said the Governing Council is unanimous in its commitment to offer further stimulus, including buying government bonds, within its mandate. "In this context, we have also tasked relevant ECB staff and Eurosystem committees with the timely preparation of further measures to be implemented, if needed," he added.
For comments and feedback contact: editorial@rttnews.com
Market Analysis