Stock Market India: Sensex, Nifty open in the red
Indian equity benchmarks fell in early trade on Monday as a jump in crude prices offset bets that measures to ease China’s economic restrictions will eventually improve the outlook for global growth and risk assets demand.
The 30-share BSE Sensex index fell 135.87 points to 62,732.63 in early trade on Monday, and the broader NSE Nifty-50 index opened lower, defying a wave of green in other Asian bourses after news of Chinese cities reducing some of the stringent curbs imposed.
“Despite the positive momentum, traders may exercise caution ahead of the monetary policy week this week, as the market had already rallied sharply in little time while valuations also look a bit stretched,” said Prashanth Tapse, Senior Vice President for Research at Mehta Equities.
Jumping oil prices after OPEC+ met on Sunday and maintained its output targets in anticipation of a pickup in fuel demand could limit advances in domestic equities.
The RBI’s monetary policy announcement, which is scheduled on Wednesday, will also be a hot topic for Indian stock markets. Interest rates are anticipated to increase by a more modest 35 basis points to 6.25 per cent by the Reserve Bank of India.
As investors processed a stronger-than-expected jobs report, which raised doubts about the ability of the US central bank to moderate rate hikes, Wall Street stocks ended the day lower on Friday.
Still, global risk sentiment early on Monday was supported by Beijing’s attempt to make its zero-COVID policy more targeted and less burdensome. On Sunday, Chinese cities announced a loosening of coronavirus bans.
“While the easing of some restrictions does not equate to a wholesale shift away from the dynamic COVID zero strategy just yet, it is further evidence of a shifting approach, and financial markets look to be firmly focussed on the longer-term outlook over the near-term hit to activity as virus cases look set to continue,” Taylor Nugent, an Economist at NAB, told Reuters.
After rising 3.7 per cent last week to a three-month high, MSCI’s broadest index of Asia-Pacific equities outside of Japan increased by 0.2 per cent.
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