Sensex, Nifty Seen Opening On Cautious Note Amid Growth Concerns

(RTTNews) - Indian shares are likely to open flat to slightly lower on Tuesday as traders return to their desks after a long holiday weekend.

Underlying sentiment may remain cautious as investors react to weak core sector output, manufacturing and auto sales data.

India's core sector output growth remained muted at 2.1 percent in July versus 7.3 percent growth seen in the same month last year. At the same time, that was an improvement from the 0.7 percent growth seen in June.

A measure of India's manufacturing growth slowed in August to its weakest level in over a year, amid weaker increases in sales, output and employment, survey data from IHS Markit showed.

The auto industry continues to face the heat of the economic slowdown as sales of four- and two-wheelers almost halved in August, compared to the corresponding month a year ago.

Singapore's banking group DBS lowered India's real GDP growth forecast for the current financial year to 6.2 percent from 6.8 percent projected earlier and said odds of further rate cuts are rising.

Asian markets remain lackluster this morning after the U.S. imposed new tariffs on certain Chinese products worth $125 billion and China imposed retaliatory measures targeting $75 billion worth of U.S. goods.

Despite the escalation in a tit-for-tat trade war between the two economic giants, U.S. President Donald Trump said that there is no change in trade talks with China, scheduled for later this month.

Gold prices edged up on safe-haven demand while the pound flirted with 2 1/2-year lows as British PM Boris Johnson issued a final Brexit ultimatum to rebel MPs, threatening a snap election if Parliament defeats the government on Brexit.

Crude oil slipped below $55 a barrel on growth concerns after a report showed South Korea's economy expanded less than estimated during the second quarter.

U.S. stocks ended mixed on Friday as a batch of economic data proved to be a mixed bag and traders expressed some uncertainty about whether the U.S. and China will resume trade talks next month and finally reach an elusive trade deal.

The Dow Jones Industrial average inched up 0.2 percent and the S&P 500 edged up marginally while the tech-heavy Nasdaq Composite slid 0.1 percent. The U.S. markets were closed on Monday for the Labor Day holiday.

European markets rose on Monday as encouraging Chinese and euro area manufacturing data helped ease concerns about slowing economic growth.

The pan European Stoxx 600 inched up 0.3 percent. The German DAX gained 0.1 percent, France's CAC 40 index advanced 0.2 percent and the U.K.'s FTSE 100 added 1 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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