Benchmark stock market indices opened flat on Friday as optimism from a possible India-US trade deal seems to have fizzled out of the market.
The S&P BSE Sensex lost 96.63 points to 84,459.77, while the NSE Nifty50 was down by 24.20 points to 25,866.45 as of 9:28 am.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that the market rally which began strongly yesterday on news of an imminent trade deal between India and US lost steam midway and completely fizzled out during the last hour.
“The positive news regarding the trade deal was not confirmed by the Indian side. This dampened the spirits of the bulls who couldn’t force further short covering. But it is important to note that the commerce minister did say that “ we hope to work towards a fair and equitable agreement with the US” and, therefore, the ongoing rally is likely to remain in tact,” he added.
A US- China trade deal also is likely in the coming summit between the top leaders from both sides. US doesn’t have a strong bargaining power with China which has huge leverage in rare earth minerals and magnets. This will force the US to climb down from its unrealistic tough tariff stance.
The shorts in the system has come down and, therefore, a strong short-covering rally, which can take the market up significantly is unlikely.