Equity indices are likely to open weaker on Friday, after witnessing a trend reversal in Thursday’s trade – from a strong open to a muted close on profit booking – and Nifty ending few points short of the keenly eyed 9,000-mark.
Globally, markets were trading weak or closed lower. Asian markets were lower in morning trade, following an overnight decline in US equities, but the Dow Jones still closed a touch above the 21,000 level. Most markets joined the retreat as US Federal Reserve Chair Janet Yellen prepares to weigh in on the path for interest rates. The Nikkei and Hang Seng were lower between 0.12 and 0.60 percent.
In the US, Wall Street closed lower as financials lagged, while social media company Snap had a strong performance in its initial public offering (IPO). The Dow and S&P 500 were lower by over half a percent, but still managed to hold on to key levels
The attention will now shift to Fed Chair Yellen, who is expected to speak at the executives club of Chicago later in the day. This speech comes at a time when markets have increasingly priced in the hike from the central bank at its March 14-15 meeting. On Tuesday, New York Fed President William Dudley had said that the case for higher rates “has become a lot more compelling” since Donald Trump’s presidential win.
Dudley’s remarks opened a floodgate of similar views from other fed officials, propelling traders’ view of a rate hike to near 75 percent in the futures market, according to CME Group’s Fedwatch tool.
In Europe, markets closed lower as investors paused after a bullish time on Wall Street. The focus was on earnings and political stability. The FTSE 100 and DAX closed almost flat with a negative bias, while the CAC 40 was flat with a positive bias.
Back home, equity benchmarks reversed all morning gains in last couple of hours of trade, weighed by profit booking after hitting a fresh 52-week high in opening trade Thursday. Positive Asian & US cues pushed the market near 9000 level in opening, but as the day progressed, investors booked profits on caution ahead of assembly elections results next week & expensive valuations.
After a swing of 361 points, the 30-share BSE Sensex closed below 29,000 level, down 144.70 points at 28,839.79. The 50-share NSE Nifty ended tad below psychological 8,900-mark, down 46.05 points at 8899.75, dragged by banking & financials, FMCG and pharma stocks.
Among stocks to watch on Friday could be Apollo Hospitals. A unit of Malaysian sovereign fund Khazanah has launched a block deal to sell USD 160 million worth of shares in the company.
The dollar gained to -week highs against a basket of currencies, after hawkish comments by a Fed official encouraged investors to expect a near-term interest rate hike. Meanwhile, crude prices fell 2 percent after Russian oil production remained unchanged in February, showing weak compliance with a global deal to curb supply to tighten the oversupplied market.
Gold prices were on track for their weakest session since December, buoyed by a firm dollar and rising rate hike expectations in the US during the Fed’s March meeting