The Indian equities benchmark is likely to open lower on Monday as indicated by the Nifty Futures trading on the Singapore Exchange. The SGX Nifty index fell 0.41 per cent or 63 points to 15,253.
The Indian equity benchmarks suffered their biggest weekly since 2020 for week ended June 17 after the rate hike by the US Federal Reserve sent global equity markets into tailspin. The Sensex plunged 5.42 per cent or 2,943 points to close at 51,360 and Nifty 50 index crashed 5.6 per cent or 908 points to end at 15,293.
Situation for equity markets, which were already reeling under pressure due to tight liquidity conditions owing to rising interest rates amid high inflation, got worse after US Federal Reserve announced 75 basis points rate hike to rein in inflation which touched new four-decade high mark in May in the US. The US Fed’s action raised tensions among investors as the move to control inflation might tip the US and other major economies into recession.
Wall Street closed out its most punishing week since the 2020 coronavirus crash with a meandering day of trading Friday that left it a bit higher.
The S&P 500 rose 8.07 points, or 0.2 per cent, to 3,674.84 after waffling between modest losses and gains for most of the day. The Dow Jones Industrial Average dipped 38.29, or 0.1 per cent, to 29,888.78, while the Nasdaq composite climbed 152.25, or 1.4 per cent, to 10,798.35.
The relatively quiet trading capped a brutal, tumultuous week for Wall Street. The S&P 500 lost 5.8 per cent for its tenth drop in the last 11 weeks. That’s its worst week since March 2020, when stocks were in free-fall as the global economy suddenly shut down at the onset of the pandemic.
Asian shares were unable to sustain a rare rally on Monday as Wall Street futures shed early gains amid worries the U.S. Federal Reserve would this week underline its commitment to fighting inflation with whatever rate hikes were needed.
The euro also softened slightly after French President Emmanuel Macron lost control of the National Assembly in legislative elections on Sunday, a major setback that could throw the country into political paralysis.
The foreign institutional investors (FII) continued to remain the net sellers worth Rs 7,819 crore, whereas the domestic institutional investors (DII) remained the net buyer’ worth Rs 6,086 crore on Wednesday, according to the data available on NSE.
Oil prices wobbled early on Monday as investors refocused on tight supplies, though sentiment was still fragile after 6 per cent slump in the previous session amid concerns about slowing global economic growth and fuel demand.
Brent crude futures gained 20 cents, or 0.2 per cent, to $113.32 a barrel by 0105 GMT, after rising as much as 1 per cent earlier. Front-month prices tumbled 7.3 per cent last week, its first weekly fall in five.
U.S. West Texas Intermediate crude was at $109.55 a barrel, down 1 cent after rising more than $1 in early morning deals. Front-month prices dropped 9.2 per cent last week, the first decline in eight weeks.
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