Global cues hint at red Nifty opening; will RBI boost mkt?

Moneycontrol Bureau

The Indian equity market is likely to open in the red after a day of marked late sell-off. The SGX Nifty, an indicator of the market opening, was trading at 7731, down 102 points at 7:21 am.

The market closed below 7800 on Monday - the first trading day of October series - as investors turned cautious ahead of much awaited RBI policy.

The 30-share BSE Sensex dropped 246.66 points or 0.95 percent to 25616.84 and the 50-share NSE Nifty plunged 72.80 points or 0.93 percent to 7795.70. The fall in broader markets was less compared to benchmarks. The BSE Midcap and Smallcap indices lost 0.2 percent each.

Global cues too are negative with the US markets having ended lower with the tech-heavy Nasdaq leading losses with 3 percent slump.

European markets too closed about 2 percent lower, pressured by continued concerns about Glencore and Volkswagen. Germany's DAX finished down 2.1 percent, hit hard by the autos. France's CAC ended down around 2.8 percent.And there seems to be no ending of trouble for Volkswagen. Swiss authorities are considering banning top models like Audi, Skoda and others after the company admitted to rigging emission tests. Former CEO Martin Winterkorn now faces a criminal probe in Germany.

Closer home, the Asian markets have followed weak overnight cues and opened up with sharp cuts. Nikkei hit its lowest level since January 23 amid a broad-based sell-off. The Straits as well is down 1 percent.

In other asset classes, the dollar declined as the yen rallies amid slumping global stock prices. The yen has been a traditional safe-haven in the currency market, along with the Swiss franc, gaining during times of economic uncertainty or stress in financial markets.

Crude prices declined almost 3 percent overnight pressured by fall in equities and weak Chinese economic data.

Gold prices decline ahead of a key US jobs report later in the week that could boost bets the US Federal Reserve will raise interest rates this year.

Back home, Shree Renuka's Brazilian subsidiary is all set to file for Chapter 11. According to sources, the unit has sought protection from creditors for limited period. The company is saddled with debt of over USD 800 million.

And PM Modi wound up his US visit with a bilateral with President Obama and thanks the US President for supporting India's UNSC bid adding that he shares Obama's commitment on climate change.