Domestic stock markets are likely to open lower on Tuesday amid weakness in global peers, a day after the International Monetary Fund (IMF) cut its growth estimate for India to 4.8 per cent for the current financial year. The Singapore Exchange (SGX) Nifty futures - an early indicator of the National Stock Exchange (NSE) Nifty index - dropped as much as 81 points to 12,191.50 ahead of the opening of Indian markets. At 8:36 am, the SGX Nifty futures were down 66.50 points - or 0.54 per cent - at 12,206.00.
IMF Chief Economist Gita Gopinath said growth in India slowed sharply owing to stress in the non-bank financial sector and weak rural income growth.
The IMF said global growth would reach 3.3 per cent in 2020, compared to 2.9 per cent in 2019, which was the slowest pace since the financial crisis a decade ago. Estimates for both years were cut by 0.1 percentage point from forecasts made in October.
The IMF also cut its global growth forecasts due to sharper-than-expected slowdowns in India and other emerging markets, but also said a US-China trade deal was another sign that trade and manufacturing activity may soon bottom out.
The update on global economy comes ahead of the start of the World Economic Forum (WEF) annual summit.
Equities in other Asian markets took a sudden lurch lower as mounting concerns about a new strain of pneumonia in China sent a ripple of risk aversion through markets. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 1 per cent after a steady start. Hong Kong, which suffered badly during the SARS outbreak, saw its index fall 2 per cent. Japan's Nikkei lost 0.8 per cent and Shanghai blue chips 1.5 per cent.
The caution spread to E-Mini futures for the S&P 500 which eased 0.4 per cent, while EUROSTOXX 50 futures lost 0.3 per cent.
On Monday, the S&P BSE Sensex index had ended 416.46 points - or 0.99 per cent - lower at 41,528.91 and the broader NSE Nifty benchmark settled at 12,224.55, down 127.80 points - or 1.03 per cent - from the previous close.
Analysts say earnings from more large cap companies will be watched closely after disappointing financial results from few large caps especially banks affected investor confidence.
Zee Entertainment, Axis Bank, Larsen & Toubro, Bank of Baroda, JSW Steel and ICICI Bank will report their earnings for the October-December period this week.