SGX Nifty Futures Point To Lower Start

( – The Nifty futures are trading lower, pointing to a weak start on Dalal Street. Rate-sensitive banking, realty and auto stocks may come under selling pressure as Reserve Bank of India Governor Raghuram Rajan indicated that he will use trends in the consumer price inflation for monetary policy decisions. Questioning the merit of low interest rates, Rajan wondered whether current ultra-low interest rates used by key central banks around the world are the right way to return to growth after the financial crisis. “Are ultra-low rates the solution or part of the problem?” he asked at a speech in Frankfurt.

Meanwhile, a government notification said that the contentious GAAR provision, which seeks to check tax avoidance by investors routing their funds through tax havens, will be effective from April 1, 2016.

India’s key benchmark indexes Sensex and the Nifty shrugged off weak global cues to end up about 0.2 percent each on Thursday after the Reserve Bank of India assured markets that it would ensure adequate liquidity and also take necessary actions, including open market operations, to support the flow of credit to productive sectors of the economy ahead of the festival season.

According to provisional data released by BSE, foreign institutional investors bought shares worth a net Rs. 172.15 crore yesterday, while domestic financial institutions offloaded shares to the extent of Rs.362.11 crore.

<b>Asian Markets </b>

Asian stocks are broadly higher amid signs Janet Yellen will likely serve as the next Federal Reserve chairman. Nevertheless, underlying sentiment remains cautious due to lack of progress in Congress over budget talks. The dollar held firm in early Asian deals as data pointing to an improving labor market revived speculation about the Federal Reserve beginning its tapering next month.

Japan’s Nikkei index is drifting lower even as official data showed Japan’s core consumer inflation hit a fresh five-year high in August. China’s Shanghai Composite is rising 0.3 percent ahead of the weeklong Golden Week holidays. The key benchmark indexes in Australia, Hong Kong, Indonesia, Malaysia, New Zealand, Singapore, South Korea and Taiwan are up between 0.2 percent and 0.7 percent.

<b>U.S. And European Markets </b>

U.S. stocks posted modest gains overnight, with the Dow and S&P 500 rebounding from five days of losses, after data showed jobless claims unexpectedly fell to a near six-year low last week and the U.S. economy expanded at an annual rate of 2.5 percent in the second quarter, unrevised from the previous estimate.

A report showing a bigger than expected drop in pending home sales in August and concerns over the U.S. budget and debt ceiling capped the upside for the markets. The Dow and the S&P 500 rose about 0.4 percent each, while the tech-heavy Nasdaq added 0.7 percent.

The European markets ended Thursday’s session with mixed results, with sentiment hit by political uncertainty in Italy after the People of Freedom Party threatened to leave parliament if former Prime Minister Silvio Berlusconi is expelled from it. France’s CAC 40 slid 0.2 percent and the German DAX slipped marginally, but the U.K.’s FTSE 100 gained 0.2 percent.

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