Market Wrap: Sensex ends volatile session with minor gains, Nifty closes flat : Podcast: Business Today
Business Today

Market Wrap: Sensex ends volatile session with minor gains, Nifty closes flat

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June 19, 2019

Despite the global stocks nearing two-week highs on Wednesday, domestic market failed to hold the opening gains due to weak sentiments at home.

Benchmark indices opened on a strong note led by positive global cues. However, significant selling pressure was witnessed at higher levels. Sensex opened at 39,176.56 level and Nifty started at 11,744.45.

In afternoon session, both benchmarks slipped over 100 points from day's high and closed marginally higher in today's trade.

After a volatile trading session, Sensex ended today's trade at 39,112, up by 66 points, while the Nifty ended flat at 11,691 level.     

The sectoral indices, that were on bullish grounds in early trade exhibited mixed trend by the closing hour. While Realty, Metal and Consumer Durables ended advanced, sectors such as Healthcare and Auto were the top losers at the closing session.

In domestic cues, delayed monsoon rains that have been 44% lower-than-average in June, have raised serious concerns of delay in the sowing of summer-sown crops and that the various parts of the country could face a worsening drought.

This shortfall could have a major impact on consumer demand, the overall economy as well as the financial markets.

While IMD forecasted average rainfall for the year, Skymet, the country's only private forecaster has predicted below-normal rainfall.

The near-term movement is likely to be driven by domestic indicators like delayed monsoon and anticipatory volatility before the Budget outcome.

In global market trends, Asian markets opened on a strong note with Nikkei, Hong Kong and China Index each gaining around 1-2%.

Hang Seng Index was up today as Carrie Lam on Tuesday signalled the end of a controversial extradition bill that she promoted and then postponed led by violent protests held by 2 million people over the last few days, that forced China into a political retreat.

On Wall-Street, US Dow Jones climbed over 1% and approached all-time highs. European Central Bank President Mario Draghi's comments indicating possibility of fresh rate cuts or asset purchases, kept the European markets like FTSE, CAC and DAX Index marginally higher in the afternoon session. This has also built up hopes of interest rate cut by the US.

Another major news from UK today was Brexit campaigner Boris Johnson stepping closer to becoming Britain's next prime minister on Tuesday, after winning 40 percent of votes in the second round of a contest.

US FOMC meet tonight will be keenly watched by investors, in which market participants expect a 25 bps cut. It will be announced by mid-night.

Market participants also await OPEC+ meet, in which OPEC nations with other producers including Russia, decide whether to extend a supply reduction pact that ends this month. OPEC has agreed to move its next meeting to July 1, which was originally planned on June 25-26 to discuss oil output policy.

In other major world news, Trump said he was prepared to take military action to stop Tehran having a nuclear bomb but left open whether he would sanction the use of force to protect Gulf oil supplies.

Another attack event reported by Reuters led a sudden spurt to the oil prices. A rocket landed at the headquarters for several global major oil companies, including US giant ExxonMobil, near Iraq's southern city of Basra early on Wednesday, that wounded two Iraqi workers. Although the Crude prices declined later, to trade below 62 per barrel against the dollar.