Indian stock market is expected to open in the green as trends on SGX Nifty indicate a positive opening for the broader index in India with a gain of 68 points.
FIIs' half-yearly report card shows sustained exodus from India
Indian equity markets continued to be battered by the incessant selling pressure exerted by FIIs/FPIs (foreign institutional investors/foreign portfolio investors) for the ninth month in succession. This is by far the longest selling streak by FIIs in the Indian markets.
Though DIIs (domestic institutional investors) have provided massive support to the markets and have tried their best to match their buying with FII selling, the indices are down more than 15 percent from their all-time high hit on October 19 last year.
Given the rise in bond yields and uncertainty about the overall health of the global economy, FIIs are moving their money to safe havens rather than staying invested in risky and tricky equity markets
Asian Markets
Asia-Pacific markets rose on the first day of the new quarter as investors wait for the results of a private survey on Chinese factory activity. The Nikkei 225 in Japan gained 0.37%, and the Topix rose 0.42%, before paring some gains.
In South Korea, the Kospi advanced 0.67%. Australia's S&P/ASX 200 was 0.59% higher. MSCI's broadest index of Asia-Pacific shares outside Japan increased 0.24%.
SGX Nifty
Trends on SGX Nifty indicate a positive opening for the broader index in India with a gain of 68 points. The Nifty futures were trading around 15,790 levels on the Singaporean exchange.
Core sector output expands by 18.1% in May
Output of eight core infrastructure sectors in India expanded by 18.1 per cent in May against 16.4 per cent in the year-ago period, according to official data released on Thursday.
Output of eight infrastructure sectors of coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity had expanded by 9.3 per cent in April 2022, the data showed. In May, output of coal, crude oil, refinery products, fertiliser, cement and electricity rose by 25.1 per cent, 4.6 per cent, 16.7 per cent, 22.8 per cent, 26.3 per cent and 22 per cent, respectively.
U.S. stocks slipped on Thursday, setting the Dow up for its worst first six months since 1962, on concerns that a dogged pursuit by central banks to tame inflation would hamper global economic growth. Fears over slowing growth and surging prices have rippled through markets, with recession worries taking center stage as monetary policymakers across the world look to aggressively raise borrowing costs.
All the three main indexes are on course to post their second straight quarterly declines for the first time since 2015.
Fed policymakers in recent days have set expectations for a second 75-basis points interest rate hike in July even as economic data painted a dour picture of the American consumer.
"Until inflation meaningfully rolls over which at this point will take, I believe months, it's going to be hard for the market to really find a bottom and begin a rally," said Ross Mayfield, investment strategy analyst at Baird.
Meanwhile, consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose less than expected in May, indicating a tepid rebound in growth in the second quarter, while inflation maintained its upward trend. [nL1N2YH162]
"A lot of investors were expecting inflation data to really start to come down. But what we're finding is that it's a lot more challenging, and that the inflation data is remaining elevated for longer and probably has not peaked," said Sam Stovall, chief investment strategist at CFRA.
Large-cap growth stocks including Microsoft Corp (MSFT.O), Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O) and Tesla Inc (TSLA.O) fell between 0.5% and 2%, leading declines for the day.
At 12:01 p.m. ET the Dow Jones Industrial Average (.DJI) was down 224.38 points, or 0.72%, at 30,804.93, the S&P 500 (.SPX) was down 22.26 points, or 0.58%, at 3,796.57 and the Nasdaq Composite (.IXIC) was down 90.17 points, or 0.81%, at 11,087.72.
Heading into the second half of the year, bruised markets will continue to focus on inflation, unemployment and interest rate increases along with their impact on corporate earnings.
"There's a sense that the earnings picture is going to be the next shoe to drop and that downward revisions to earnings will catalyze another leg lower in the market," Baird's Mayfield said.
Walgreens Boots Alliance Inc (WBA.O) fell 4.5% as the drugstore chain maintained its full-year earnings forecast due to declining COVID vaccinations. read more
Declining issues outnumbered advancers for a 1.87-to-1 ratio on the NYSE and for a 1.79-to-1 ratio on the Nasdaq.
The S&P index recorded one new 52-week high and 42 new lows, while the Nasdaq recorded 11 new highs and 332 new lows
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