Markets to open lower

Equities are expected to remain subdued on Monday as reduced hopes of a rate cut by US Federal Reserve turned global markets weak.

 

Also, a sharp fall in oil prices and signs of resilience in the labour market offset concerns that tighter credit is hurting consumer spending saw US markets end on a flat note on Friday.

 

Dow Jones industrial average finished 5.69 points or 0.04 per cent higher at 13,625.58. But Standard & Poor's 500 Index closed down 2.68 points or 0.18 per cent at 1,504.66. Nasdaq Composite Index slipped 2.87 points or 0.11 per cent to 2,706.16.

 

Ahead of Friday's jobs report, investors had been hopeful that the Federal Reserve would cut short-term rates by a half percentage point to rescue a sinking economy after recent comments by Fed officials.

 

But the Labor Department report showed US employers added 94,000 jobs last month, slightly above forecasts by Wall Street analysts and a moderately positive sign for the economy.

 

Benchmarks across Asia were trading flat following Wall Street cues with Japan's Nikkei down 0.5 per cent. Hong Kong's Hang Seng lost 0.93 per cent and South Korea's KOSPI fell 0.59 per cent.

 

"Nifty has support at 5940, 5880 and 5820 levels and will face resistance at 6040, 6065 and 6115. Closing above 6065 and also sustaining above the same may result in fireworks and change the picture in total favour of the bulls. On the downside, 5680 will be the critical level to watch out for," said Bharat Dalal, vice president-stck broking at Dawnay Day AV Securities.

 

Small and mid cap IT stocks could be the dark horse for investment with a medium term to long term time horizon period, Dalal advises.

 

Friday, Bombay Stock Exchange's Sensex closed at 19,966, up 170.13 points or 0.86 per cent. It was 11 points short of all time closing high of 19,977.67 recorded on October 29. Intra-day, the index swung between a high of 20,094.56 and low of 19,706.43.

 

National Stock Exchange's Nifty closed at 5,976.15, up 0.36 per cent or 22 points after touching an all-time high of 6,042.10 earlier in the day. The low was 5894.80.

 

Foreign institutional investors' net sold equity worth Rs 253.84 crore on Friday while mutual funds were net buyers of equity worth Rs 339.64 crore, according to provisional data on NSE.