Sensex & Nifty are expected to open sharply lower on Monday amid tracking global markets reaction to Fed chair Powell comments on rate hikes and inflation. On Friday, US and Europe markets declined by more than 2% as Fed reassured markets that Fed will keep raising interest rates till inflation drops to 2% target range. FIIs/FPIs have been net buyer for the month of July & August 2022. Sensex & Nifty likely to witness spurt in volatility as markets are discounting longer tenor of interest rate cycle and flash estimates of PMI show decline for most of developed countries.
In the coming week, US non-farm payroll data and Eurozone inflation data will be keenly watched as these data points would influence Fed and ECB rate hikes during September policy-meeting. Domestic investors will track global cues closely and would watch out for Q2 GDP growth data.
Equity Market Summary:
o Wallstreet indices closed sharply lower on Friday as Fed chair Powell reassured markets that Fed will keep raising interest rates till inflation drops to 2% target range. Dow jones declined by 1000 points and Nasdaq plunged over 3%.
o European equity markets closed sharply lower on Friday, amid soaring energy prices and expectations of sharp rise in interest rates.
o The S&P Global US Services PMI fell to 44.1 levels in August 2022 from 47.3 levels in July 2022, signaling the sharpest contraction since May 2020.
o The number of Americans filing new claims for unemployment benefits went down by 2,000 to 243,000 in the week ended 20th August 2022.
o Brent crude prices recovered to USD 100 per barrel mark amid uncertain supply levels against lower energy demand.
o The S&P Global Eurozone Services PMI fell to 50.2 levels in August 2022 from 51.2 levels in July 2022 and below market expectations of 50.5 levels.
o Profits earned by China's industrial firms declined by 1.1% YoY to CNY 48.93 trillion in the first seven months of the year, reversing from a 1.0% growth in the previous period.
