Will weak global cues & crude price keep Nifty below 8600?


Sluggish global cues due to renewed sell-off in crude prices may drag Indian market Thursday. Asian shares fell, reversing recent gains as investors took profits after Wall Street declined overnight, and oil prices tumbled on news of a surprising jump in US government stockpiles.

MSCI’s broadest index of Asia-Pacific shares outside Japan. It hit a one-year high on Wednesday and has broadly outperformed the MSCI world index. Japan’s markets are closed for a holiday.

A weakening stock market and strong demand for government debt at bond auctions pushed yields down further. The yield on the benchmark 10-year Treasury note extended a recent drop to fall to 1.508 percent while the yield on 10-year UK gilts tumbled to a record low of 0.52 percent.

Wall Street retreated from record levels as a drop in oil prices pressured energy stocks and weighed more heavily than a surge in Walt Disney.

A rally since late June has taken the S&P 500 up over 6 percent in 2016, as continued low interest rates encourage investors to buy US equities, although many investors are concerned about high valuations.

Back home, the 30-share BSE Sensex lost 310.28 points or 1.10 percent at 27774.88 and the 50-share NSE Nifty plunged 102.95 points or 1.19 percent to 8575.30. The broader markets were also caught in bear grip. The BSE Midcap and Smallcap indices were down more than a percent as about 1893 shares declined against 840 advancing shares on the exchange.

The government relaxed foreign direct investment (FDI) structure for non-banking financial corporations and extended window beyond 18 sub-sectors allowed currently. Regulated entities can now get foreign investment via the automatic route.

In important earnings today, Bank of Baroda will report its numbers. A CNBC-TV18 poll sees a profit decline of 56 percent and slippage from restructured book will be eyed keenly while gross NPA below 10.5 percent will be positive.

Shares of infrastructure firm Dilip Buildcon will make its stock market debut today.Dilip Buildcon’s IPO had attracted massive demand, with the offer getting subscribed by around 21 times. The company had fixed the price band at Rs 214-219 per share for its IPO which was open from August 1-3.

The US dollar fell broadly as US treasury yields fell and investors waited on a speech by Federal Reserve Chair Janet Yellen later this month. Crude prices continued to decline after an unseasonal growth in crude stockpiles offset the second-biggest weekly draw in US gasoline this summer.

Gold prices gained as weak US data weighed on the dollar.