Sensex Set For Rebound After Biggest Fall

Domestic stock markets are likely to open higher on Tuesday, a day after the Sensex witnessed its worst selloff since January 2009. Trading in Nifty futures on the Singapore Exchange indicated that Indian stock markets could start over 2 per cent higher.

Dalal Street is likely to move higher after Sensex ended 5.94 per cent lower on Monday. The 1,625-point loss was the biggest one-day crash for the Sensex.

The rupee, which sank to a fresh two-year low of 66.74 per dollar in intraday trade on Monday, could see some respite today, analysts said. Weakness in the dollar index could support emerging market currencies, analysts said.

Domestic institutions bought shares worth over Rs 4,000 crore yesterday, preventing further slide in markets. They are expected to continue buying Indian equities.

Finance Minister Arun Jaitley briefed Prime Minister Narendra Modi on the selloff yesterday evening. Mr Jaitley said he wanted more steps to be taken to strengthen the Indian economy but cautioned that this could not be done in the next day or two.

Markets in China traded with over 4 per cent losses today. Further slide can create another round of global selloff, analysts said. Markets in Asia opened sharply lower today, but later bounced back from day’s low, a factor that may support domestic stocks. Japan’s Nikkei index saw some recovery after falling over 4 per cent to six-month lows in early trade, while Australia’s benchmark index traded in the green.

Overnight, the Dow Jones industrial average briefly slumped more than 1,000 points – its most dramatic intraday trading range ever. It closed down 588.4 points, or 3.57 per cent, at 15,871.35.The S&P 500 lost 77.68 points, or 3.94 percent, to 1,893.21, putting it formally in correction mode. An index is considered to be in correction when it closes 10 percent below its 52-week high. The Dow was confirmed to be in a correction on Friday.

The widespread unrest in global markets was set in motion nearly two weeks ago when China sharply devalued the yuan following which most emerging market currencies tumbled sharply.

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Source:Ndtv

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