INDIAN BENCHMARKS Another strong start set to cheer Dalal Street
The Indian shares are likely to see a strong start as the global cues look supportive with SGX Nifty trading 51.50 points higher.
Indian equity benchmarks are likely to witness a gap up opening on Monday tracking a mostly positive trend across markets in Asia amid growing optimism that the US economy is in strong shape to withstand the effect of higher interest rates, bolstering risk taking appetite.
While US economic growth in the first quarter was revised up to 0.8 per cent annualized pace from 0.5 per cent reported earlier, Fed Chair Janet Yellen said that an improving American economy is likely to pave the way for a hike in borrowing costs in the coming months.
Most Asian stocks advanced on speculation that the world’s biggest economy is strong enough to handle higher borrowing costs.
Shanghai Composite fell as metal and technology shares retreated while a slowdown in Chinese industrial profit growth to 4.2 per cent, year on year, in April 2016 from 11.1 per cent in March 2016, added to the worries over the world’s second biggest economy.
Hang Seng rose and Japan’s Nikkei 225 jumped as a weaker yen bolstered the appeal of exporter stocks.
Wall Street marked a bullish finish on Friday with benchmark S&P 500 scoring its biggest weekly gain since March as Yellen said that improvement in the US economy warranted a rate hike as early as this summer.
European shares were steady on Friday, propped up by the Swiss stock market and pharmaceuticals companies after drugmaker Roche climbed on positive results for one of its products.
Major Headlines of the day:
- Sun Pharma gets US subpoena over generic drugs pricing
- Tech Mahindra to buy out UK's Target TOPCO Ltd for GBP 112mn
- Bajaj Auto eyes 25% market share in domestic motorcycle industry.
Trend in FII flows: The FIIs were net sellers of Rs -479.89 Cr in the cash segment on Friday while the DIIs were net buyers of Rs 69.34 Cr, as per the provisional figures.