Futures slip after Wall Street's best day in two months
Sensex surges for second day, Nifty regains 11,100
U.S. stocks futures slipped on Friday, a day after Wall Street roared back to record its biggest one-day rise in two months, as investors grappled with fresh trade tensions and political turmoil in Britain and Italy.
Despite a turbulent week that started with the three main indexes having their worst oneday percentage fall of 2019 on renewed trade war fears, the benchmark S&P 500 .SPX has managed to hold onto small gains as bargain hunters picked up beaten down stocks.
Worries of the economy slipping into a recession are back, as the trade war between the United States and China shows little signs of easing, especially after a symbolic drop in China's currency earlier this week.
The latest concern was a report that Washington was delaying a decision about allowing some trade between U.S. companies and China's telecom equipment maker Huawei again, pressuring chipmakers and other tariff sensitive stocks.
Micron Technology (MU.O), Nvidia Corp (NVDA.O) and Intel Corp (INTC.O) fell between 1% and 2% in premarket trading, while Apple Inc (AAPL.O) slid 0.9%. European shares were sharply lower as Italy's ruling League party Deputy Prime Minister Matteo Salvini declared the governing coalition to be unworkable, while a report said Prime Minister Boris Johnson was preparing to hold an election in the days after "October 31 Brexit deadline".
At 6:57 a.m. ET, Dow eminis 1YMcv1 were down 137 points, or 0.52%. S&P 500 eminis EScv1 were down 17 points, or 0.58% and Nasdaq 100 e-minis NQcv1 were down 61.25 points, or 0.79%.
Investors looking for safety in turbulent times helped the defensive sectors, with consumer staples . SPLRCS, utilities . SPLRCU and real estate .SPLRCR indexes outperforming the broader S&P 500 this week. Following a near 12% jump, Symantec Corp (SYMC.O) gained 2.5% after chipmaker Broadcom Inc (AVGO.O) confirmed it would buy the antivirus software maker's enterprise security unit for $10.7 billion in cash.
Nektar Therapeutics (NKTR.O) shares plunged 34.1% after the drug developer flagged manufacturing issues with its experimental cancer drug bempeg. U.S. producer prices increased moderately in July, lifted by a rebound in the cost of energy products, while underlying producer inflation retreated, which could allow the Federal Reserve to cut interest rates again next month.
The Labor Department said on Friday its producer price index for final demand rose 0.2% last month after nudging up 0.1% in June. In the 12 months through July the PPI increased 1.7% after advancing by the same margin in June. Economists polled by Reuters had forecast the PPI would rise 0.2% in July and increase 1.7% on a year-on-year basis.
Excluding the volatile food, energy and trade services components, producer prices edged down 0.1% last month. That was the first decline since October 2015 and followed an unchanged reading in June.
Sensex and Nifty surged today, extending Thursday's strong gains, as the sentiment turned positive on strong buzz that the government may axe higher FPI tax. The Sensex ended 0.70% or 254 points higher at ?37,581 while Nifty settled 0.70% higher at 11,109.
"Market turned hopeful expecting some form of respite from the government after RBI cut the policy rate by 35 bps while underlying trends in 1QFY20 results and management commentary on domestic economy remained weak," said Sanjeev Zarbade, VP PCG Research, Kotak Securities.
"Upside may come from any concrete measures which the government proposes to reverse the pessimism and lift the investor confidence," he added. Banking and auto stocks lead the gains today. Some buying was also seen in FMCG and realty stocks. Among the Sensex 30 stocks, Maruti Suzuki rose 3.4%, Vedanta 2.2%, Bajaj Finance 2%, HDFC Bank 2% and HUL 1.9%. Other top gainers included Kotak Bank, HDFC, ICICI Bank and Hero MotoCorp.