Indian Markets
The key Indian stock benchmarks have taken a beating, as a combination of domestic and global headwinds continue to keep investors at bay despite reasonable valuations. A fresh record low for the rupee, coupled with the overnight selloff across asset classes has dented investor confidence this morning. A big headache for Indian policymakers at the moment is the unrelenting slide in the rupee. With the dollar in great demand and macro-economic fundamentals weak, the pressure is likely to continue on the Indian currency. That may, in turn keep FII inflows depressed. In short, things could worsen before they start looking up again. So, brace for some more volatility and uncertainty.
US and European Markets
U.S. stocks tumbled on Wednesday as the European debt crisis continued to weigh on the markets and a stronger dollar dragged down commodities prices. Dow Jones sank 131 points, or 1.1%, to 11,823. S&P 500 fell 14 points, or 1.1%. to 1,212. Nasdaq shed 40 points, or 1.5%, to 2,539.
European shares have closed sharply lower and the euro tumbled to near one-year dollar lows. The pessimistic mood was fuelled by fresh concerns the measures trumpeted at last week's EU summit will not solve the eurozone debt crisis. Britain's FTSE 100 fell 2.3%, Germany's DAX slid 1.7% and France's CAC 40 shed 3.3%.
Asian Markets
Today, all the Asian indices are trading in the red with Hang Seng and Shanghai trading lower by 2.3% and 256 respectively. Kospi and Taiwan are down by 1.9% and 1.8% respectively. Strait Times and Nikkei are trading lower by 1.4% and 1.3% respectively. As of IST 8.44 am, SGX Nifty is trading lower today by 61.5 points.
Currencies
The Indian rupee hit yet another record low on Wednesday as worse-than-expected inflation data and the US Fed?s decision to hold back on new stimulus steps heightened fears that capital outflows from emerging economies such as India could accelerate.
Commodities
Among the metals, Zinc lost the most (3.5%) while Copper and Nickel ended lower by 3.3% each. Aluminium fell by 2.4%. Oil for January delivery fell $5.19 to $94.95 a barrel. Gold futures for February delivery sank $76.20 to $1,586.90 an ounce.
Key events to watch for today
India WPI Data Weekly
EU PMI Manufacturing Index
EU PMI Services Index
US Jobless Claims
US PPI Data
US Industrial Production Data
US EIA Natural Gas Report
Outlook for Today
Today, we expect the Indian Markets to open lower on the back of negative global cues. Among the sectoral indices, Capital Goods, Realty and Metals stocks could underperform
Source- RH Morning market update, HDFCSEC
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