The News International Team
The Indian market may remain subdued and open in red despite equity benchmarks snapping a three-day losing streak and closing marginally higher on Wednesday. The SGX Nifty was around 8374, down 34 points led by global cues.
The 30-share BSE Sensex rose 34 points to 27831 and the 50-share NSE Nifty closed above 8350 level, up 15 points at 8357 amid consolidation on Wednesday despite mixed global cues. The broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices gaining close to 1 percent each.
Among global markets, stocks in the US closed sharply lower, furthering the week’s losses, as the price of crude fell to a new five-year low and the Organization of Petroleum Exporting Countries OPEC) cut its demand outlook for next year.
The Dow Jones industrial average had its worst day since October 9. The index fell more than 280 points before recovering some of the losses to trade which was about 270 points lower. The CBOE volatility index, spiked 23 percent to 18.39.
Shares in Europe closed largely lower, continuing a declining trend as Greek political fears and slumping oil prices weigh.
In Greece, Prime Minister Antonis Samaras named his candidate for a snap presidential vote to be held next week. Samaras called the election on Monday, surprising investors and causing the Greek stock market to decline and pushing bond yields higher.
Meanwhile, tension between Ukraine and Russia remained heightened after Ukraine’s military accused separatists of violating a ceasefire. The ceasefire was hoped to be a prelude to a more lasting cessation of hostilities.
In Asia, Japan’s leading gauge of capital spending snapped a four-month rising streak in October. Core machinery orders fell 6.4 percent on month, worse than expectations for a 2.4 percent decline and slower than September’s 2.9 percent increase. Year-on-year, machinery orders fell 4.9 percent in October, worse than expectations for a 0.3 percent decline.
Kospi was near a five-week low early Thursday. Monetary policy decisions in South Korea, the Philippines and Indonesia are also due on Thursday but no change is expected.
In the currency space, the dollar remained on the back foot, having fallen for a third session against the yen as the market unwound stretched positions to lock in profits with just one full week of activity left this year.
In commodities, crude prices remain near the lowest for more than five years after data showing a spike in the US. After another pledge by Saudi Arabia not to cut output, OPEC reduced its estimate for 2015 by roughly 300,000 barrels a day, with the cartel saying the effect of the 40 percent drop in prices on supply and demand is uncertain.
From precious metals space, gold steadies near a 7-year peak as equity markets surrendered earlier gains to turn lower and the dollar extended losses versus a basket of currencies.
Back home, fiscal deficit has reached unmanageable levels says Finance Minister Arun Jaitley. According to sources, government stands to gain nearly Rs 75,000 crore by compressing plan expenditure for this fiscal. FM promises once again to rationalise LPG subsidies.
Meanwhile, public sector banks will be in focus as the Cabinet clears allowing them to raise capital to meet additional capital requirements. The capital will be raised under Basel-III norms by diluting government holding up to 52 percent in a phased manner.