Bargain hunting may lift shares

Shares may rise on bargain hunting following a steep sell off in the previous session. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 25.50 points at the opening bell.

Overseas, most Asian shares declined as the trade dispute between the US and China remained in focus. US stocks closed higher Wednesday, after the minutes from the Federal Reserve's 2 May 2018 meeting appeared to have reassured investors that the central bank will not be too aggressive with raising interest rates. Stocks were under pressure earlier as geopolitical and trade concerns continued to dent investor sentiment.

The US Department of Commerce started an investigation into automobile imports to determine whether they threaten to impair the national security of the United States. The new US probe will be carried out under Section 232 of the Trade Expansion Act of 1962. That section of the law authorizes the secretary of Commerce to determine the effects of imports of any article on the national security of the United States.

Meanwhile, Federal Reserve officials would be content to let inflation briefly run above their 2% target as the economy continues to recover, according to minutes from the central bank's most recent meeting. Following the May 1-2 session, the policymaking Federal Open Market Committee (FOMC) said it was not raising rates yet but added the word symmetric to describe its inflation goal. The summary released Wednesday indicates a substantial level of debate over how the Fed should approach inflation. The minutes also pointed to an interest rate hike at the June meeting amid debate over how close the Fed might be getting to the end of this rate-hiking cycle

On the US data front, the IHS Markit purchasing managers index for May inched up to 56.6 from 56.5 in the previous reading. Separately, Markit's PMI for services rose to 55.7 from April's 54.6. New-home sales came in at a 662,000 seasonally adjusted rate in April.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 311.11 crore yesterday, 23 May 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 789.78 crore yesterday, 23 May 2018, as per provisional data.

Among corporate news, Gail (India), Glaxosmithkline Pharmaceuticals and MOIL will announce January-March 2018 results on 24 May 2018.

Domestic equities suffered sharp losses tracking weakness in global stocks yesterday, 23 May 2018. The barometer index, the S&P BSE Sensex, lost 306.33 points or 0.88% to settle at 34,344.91. The Nifty 50 index lost 106.35 points or 1.01% to settle at 10,430.35. Stocks across the globe fell as investors continued to assess potential trade tensions, the possible cancellation of a June summit with North Korea and a fall in commodity prices.

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