Key benchmark indices may edge lower in early trade amid mixed cues in Asian stocks. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 15.50 points at the opening bell.
Overseas, Asian stocks were mixed after the Bank of Japan kept monetary policy steady and offered a brighter view of the economy today, 20 December 2016, signaling its conviction that a weak yen and a rebound in overseas demand will heighten prospects for a solid recovery.
The BOJ maintained the 0.1% interest it charges on a portion of excess reserves that financial institutions park with the central bank. It also left unchanged its 10-year government bond yield target of around zero percent. Japan's economy is projected to grow 1.5% in inflation-adjusted terms in the fiscal year starting in April, thanks to a gradual uptick in the global economy and a recent weakening of the yen against the dollar.
US stocks closed with modest gains yesterday, 19 December 2016, in low volume trade as traders bought some recently less-favored sectors, while some top postelection plays lagged. In economic news, the flash US Markit PMI services for December was 53.4, down slightly from 54.6 in November.
In her first speech after raising interest rates for only the second time this decade, Federal Reserve Chairwoman Janet Yellen said the US has the strongest jobs market in nearly a decade, and there are indications wage growth is picking up. But Yellen also noted the economy is growing more slowly than in past recoveries and productivity growth has been disappointing. Yellen was speaking at a University of Baltimore commencement ceremony. The Federal Reserve had raised rates for the second time in a decade last week and surprised by forecasting three rate hikes for 2017, more than the consensus two.
Back home, the market settled with modest losses in a lacklustre trading session yesterday, 19 December 2016, as weakness in Asian markets, decline in major US stock indices over the weekend coupled with tepid trading on the European bourses weighed on sentiment. The Sensex lost 114.86 points or 0.43% to settle at 26,374.70, its lowest closing level since 7 December 2016 on that day.
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The foreign portfolio investors (FPIs) sold shares worth a net Rs 535.70 crore yesterday, 19 December 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 556.36 crore yesterday, 19 December 2016, as per provisional data.
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