Sensex, Nifty Likely To Open Sharply Lower Today

Equities in other Asian markets followed Wall Street, which saw its worst day since mid-March.

Sensex, Nifty Likely To Open Sharply Lower Today

Analysts awaited macroeconomic data due after market hours for more clarity on monetary policy

Domestic stock markets are likely to start Friday's session on a sharply lower note tracking global equities, which tumbled over growing concerns that a resurgence of coronavirus infections could stunt the pace of reopening economies. The Singapore Exchange (SGX) Nifty futures - an early indicator of the National Stock Exchange (NSE) Nifty 50 index - dropped as much as 4.05 per cent (401.25 points) to hit 9,494.75 ahead of the opening of Indian markets. At 8:16 am, the SGX Nifty futures traded down 278.20 points - or 2.81 per cent - at 9,617.80.

Analysts awaited macroeconomic data due after market hours for more clarity on monetary policy going forward. Official data on consumer inflation and industrial production will be released at 5:30 pm.

Consumer inflation - or the rate of increase in retail prices determined by the Consumer Price Index (CPI) - is likely to have moderated to a six-month low of 5.50 per cent in May, according to a poll of 35 economists by news agency Reuters.

Equities in other Asian markets followed Wall Street, which saw its worst day since mid-March, with MSCI's broadest index of Asia Pacific shares outside Japan last seen trading 1.12 per cent lower. While Japan's Nikkei 225 benchmark index traded 1.52 per cent lower at the time, China's Shanghai Composite, Hong Kong's Hang Seng and South Korea's KOSPI barometers were down 0.51 per cent, 1.03 per cent and 2.48 per cent respectively.

The E-Mini S&P 500 futures were up 1.07 per cent in early Asian trade, indicating a positive start for US markets on Friday.

Overnight in the US, the S&P 500 index plunged 5.89 per cent in its steepest one-session loss since March 16, following renewed fears of a coronavirus resurgence as US states gradually reopen their economies after a nearly countrywide shutdown. The Dow Jones Industrial Average tumbled 6.90 per cent, whereas the tech-heavy Nasdaq Composite lost 5.27 per cent.

Cases of the disease have jumped in several US states in recent days, raising concern among experts who say authorities have loosened restrictions put in place to contain the spread too early.

Investors also reacted to dour economic forecasts from the Federal Reserve. 

The US central bank released a gloomy economic outlook at the end of its two-day monetary policy meeting on Wednesday. Chair Jerome Powell warned of a "long road" to recovery.

Equities have surged since late March, with the Nasdaq reaching record highs and the S&P 500 climbing over 40 per cent from March lows as the number of coronavirus cases nationwide declined modestly.

On Thursday, the Sensex had ended 708.68 points - or 2.07 per cent - lower at 33,538.37, and the Nifty settled at 9,902.00, down 214.15 points - or 2.12 per cent - from its previous close.