The Indian stock market is expected to open in the green as trends on SGX Nifty indicate a positive opening for the broader index in India with a gain of 63 points.
Indian stock markets seem to be ensnared by a bear trap as the benchmark indices slumped to fresh 52-week lows on June 16, stretching their losing streak to a fifth consecutive session. The BSE Sensex plunged 1,046 points or 2 percent to 51,496 while the Nifty50 tanked 332 points or 2.11 percent to 15,360.60.
The broader markets fell in line with the benchmarks. Nifty Midcap 100 and Smallcap 100 slumped more than 2 percent and 3 percent respectively.
Market breadth was largely in favour of the bears; about eight shares declined for every share rising on the NSE.
Stay tuned to Moneycontrol to find out what happens in the currency and equity markets today. We have collated a list of important headlines across news platforms which could impact Indian as well as international markets:
US stock indexes closed sharply lower on Thursday in a broad sell-off as recession fears grew following moves by central banks around the globe to stamp out rising inflation after the Federal Reserve’s largest rate hike since 1994.
The benchmark S&P 500 suffered its sixth decline in seven sessions. Stocks had rallied on Wednesday as the Fed delivered an aggressive 75 basis point rate hike, as expected, to help the index snap its longest daily losing streak since early January.
The Dow Jones Industrial Average fell 741.46 points, or 2.42%, to 29,927.07, the S&P 500 lost 123.22 points, or 3.25%, to 3,666.77 and the Nasdaq Composite dropped 453.06 points, or 4.08%, to 10,646.10.
Shares in Asia-Pacific were lower in Friday morning trade, following sharp declines on Wall Street as investors weigh the possibility of aggressive monetary policy tightening leading to a recession. The Nikkei 225 in Japan fell 2.32% while the Topix index shed 2.25%. South Korea’s Kospi declined 1.17%.
Trends on SGX Nifty indicate a positive opening for the broader index in India with a gain of 63 points. The Nifty futures were trading around 15,372 levels on the Singaporean exchange.
India better placed than many other economies to avoid stagflation, says RBI article
India is better placed than many other countries to avoid the risks of a potential stagflation amid an increasingly hostile external environment, as per an RBI article on the state of the economy. The article, published in the RBI’s June bulletin, noted that global economic conditions continue to deteriorate as ratcheting up of commodity prices and financial market volatility have led to heightened uncertainty.
“In the midst of this increasingly hostile external environment, India is better placed than many other countries in terms of avoiding the risks of a potential stagflation,” said the article authored by a team led by RBI’s Deputy Governor Michael Debabrata Patra. Stagflation refers to a situation where inflation as well as unemployment are high, while demand remains stagnant in the economy.
Oil edges down as demand concerns weigh, heading for weekly fall
Oil prices edged slightly lower on Friday as worries about global economic growth and uncertainty weighed on markets following numerous interest rate hikes around the world this week. Brent crude futures fell 83 cents, or 0.8%, to $118.98 a barrel, while U.S. West Texas Intermediate crude futures fell to $116.79 a barrel, down 80 cents, or 0.7%.
Crypto selloff resumes as post-Fed mood sours
The selloff in the digital-asset space accelerated Thursday, with losses in US equities also snowballing, a day after the Federal Reserve raised interest rates by the most in decades.
Ether, down as much as 8.3% on Thursday to trade around $1,080, is facing a tougher road than most. The native token for the Ethereum blockchain is on pace to decline for a 10th straight day, the longest losing streak in Bloomberg records back to February 2018. It has lost about 40% since the start of June alone.
Bitcoin, meanwhile, held up relatively better, though it still shed 4.2% at one point during the session. Many investors say the largest cryptocurrency by market value often serves a place of refuge for crypto investors during volatile periods.
RBI turns net buyer of US currency in April; buys $1.965 Billion
The Reserve Bank of India (RBI) turned net purchaser of the US currency in April after it bought $1.965 billion from spot market, according to RBI’s monthly bulletin for June. In the reporting month, RBI bought $11.965 billion and sold $10 billion in the spot market, the bulletin released on Thursday showed.
In March 2022, RBI had net sold $20.101 billion. It had purchased $4.315 billion and sold $24.416 billion in the spot market, the data showed. During the fiscal 2022, the central bank had net purchased $17.312 billion. It had bought $113.991 billion and sold $96.679 billion in the spot market in FY22.
In the forward dollar market, the outstanding net purchase at the end of April 2022 was $63.826 billion, compared to a purchase of $65.791 billion in March 2022, the data showed.
BOJ to maintain ultra-low rates
The Bank of Japan is likely to maintain ultra-low interest rates on Friday and stress its resolve to support a fragile economy with massive stimulus, a move that may spark a renewed yen fall by highlighting a policy divergence with the rest of the world.
The likelihood that Japan will remain an outlier while global central banks tighten policy to combat inflation has pushed the yen down to 24-year lows, threatening to cool consumption by boosting already rising import costs. But rising concerns over the weak yen have not deterred the BOJ from defending an implicit 0.25% cap for its 10-year bond yield target through ramped-up bond purchases.
FII and DII data
Foreign institutional investors (FIIs) net sold Rs 3257.65 crore worth of shares, whereas domestic institutional investors (DIIs) remained net buyers to the tune of Rs 1929.14 crore worth of shares on June 16, as per provisional data available on the NSE.
Stocks under F&O ban on NSE
Three stocks – Indiabulls Housing Finance, RBL Bank, and Delta Corp – remained under the NSE F&O ban for June 17 as well. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.
With inputs from Reuters & other agencies