Market may open on dismal note on weak global stocks

SGX Nifty:

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could slide 160 points at the opening bell.

Reserve Bank of India (RBI) Governor Shaktikanta Das will unveil the first monetary policy of the new financial year on Friday, 8 April 2022, after a two-day review amid concern over inflation that is quickening on the back of higher crude oil and other commodity prices.

Global markets:

Overseas, Asian stocks declined on Wednesday, mirroring losses seen among their peers on Wall Street following an overnight surge in the U.S. 10-year Treasury yield.

Chinese services sector activity saw a sharp contraction in March, a private survey showed Wednesday. The Caixin services Purchasing Managers' Index declined to 42.0 in March, well below February's reading of 50.2 as well as the 50 mark that separates growth from contraction on a monthly basis. Wednesday's reading was also the lowest since February 2020.

Wall Street's main indices fell on Tuesday, dragged by weakness in tech and other growth stocks, after comments from Federal Reserve Governor Lael Brainard spooked investors about potential aggressive actions by the central bank to control inflation.

After opening the day slightly positive, stocks fell and rates hit their highs after Brainard, who is typically considered one of the more dovish Fed members, said the central bank needs to shrink its balance sheet rapidly to drive down inflation. Inflation is much too high and is subject to upside risks, she said, noting the Fed needed a steady pace of rate hikes as well.

Investors will continue to monitor moves in U.S. Treasurys. The 10-year Treasury rose to its highest level since May 2019 on Tuesday, hitting a high of 2.562% before settling at 2.55%. The yield on the benchmark 10-year Treasury note last sat at 2.6011%, well above the 2-year Treasury note's yield of 2.5751%.

The 10-year Treasury yield jumped overnight after comments from U.S. Federal Reserve Governor Lael Brainard suggested an aggressive approach to shrinking the central bank's balance sheet.

Domestic markets:

Back home, key indices ended with modest losses on Tuesday, snapping a two-day rising streak. The S&P BSE Sensex slipped 435.24 points or 0.72% at 60,176.19. The Nifty 50 index shed 96 points or 0.53% at 17,957.15.

Foreign portfolio investors (FPIs) bought shares worth Rs 374.89 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 105.42 crore in the Indian equity market on 5 April, provisional data showed.

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