Pre Session Commentary

Weak opening on the cards on subdued global cues
(08:18, 28 Sep 2022)

SGX Nifty:

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could slump 182 points at the opening bell.

Meanwhile, the Reserve Bank of India (RBI)'s six-member Monetary Policy Committee meeting will begin today, 28 September 2022. RBI Governor Shaktikanta Das will announce the MPC decision on 30 September 2022, the last date of the meeting. The RBI is widely expected to maintain the balancing act between growth and inflation.

In the past three policy reviews, the RBI's rate-setting panel has raised 140 basis points in total since May this year. Currently, the repo rate, the interest rate at which the RBI lends to the commercial bank, stands at 5.40%.

Global markets:

Overseas, Asian stocks are trading lower on Wednesday as surging borrowing costs fed fears of a global recession.

Consumer inflation excluding fresh food is likely to rise this year, but the rate of increase will slow thereafter on energy prices, minutes from Bank of Japan's July meeting said. A few members also said inflation, excluding fresh food and energy, is unlikely to reach 2% within its projection period.

Shaking investor confidence has been the collapse in sterling and UK bond prices, which could force some fund managers to sell other assets to cover resulting losses.

Global ratings agency Moody's has warned the British government that plans for unfunded tax cuts could lead to larger budget deficits and higher interest rates, threatening the country's credibility with investors. The agency said large unfunded tax cuts were credit negative, leading to structurally higher deficits amid rising borrowing costs, a weaker growth outlook and acute public spending pressure.

U.S. stocks gave up early gains to fall deeper into a bear market on Tuesday as investors remained nervous about a potential global recession.

The Fed needs to raise interest rates by at least another percentage point this year, Chicago Fed President Charles Evans said on Tuesday.

Domestic markets:

Back home, the equity market extended losses to fifth day on Tuesday, ending marginally lower after a volatile session. The barometer index, the S&P BSE Sensex, declined 37.70 points or 0.07% to 57,107.52. The Nifty 50 index lost 8.90 points or 0.05% to 17,007.40.

Foreign portfolio investors (FPIs) sold shares worth Rs 2,823.96 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 3,504.76 crore in the Indian equity market on 27 September, provisional data showed.

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