“5 things to know before the stock market opens” is a daily look at the most important news, trends and analysis that investors need to start their trading.

The Indian benchmark indices erased most of their recent losses to end higher on February 27 with Nifty around 22,200 amid buying seen in the auto, capital goods, IT and realty names.

At close on February 27, the Sensex was up 305.09 points or 0.42 percent at 73,095.22, and the Nifty was up 76.30 points or 0.34 percent at 22,198.30.

“We expect to see markets move lower at the open.” Hearing these predictions may make you wonder how these pundits can predict the future and why investors care about the direction of the market open. After all, the closing price should tell you how much money you have gained or lost in your portfolio for the day.

KEY TAKEAWAYS:-

• Trading stocks takes an abrupt halt each trading afternoon when the markets close for the day, leaving hours of uncertainty between then and the next day’s open.
• Predicting where the market will resume trading at the open can help investors both hedge risk and place bets on the next day’s price action.
• After-hours trading in stocks and futures markets can provide a glimpse, but these tend to be less liquid and prone to more volatility than during regular trading hours.
• For a better picture, investors look to international markets that are open while the U.S. is closed, to economic data released by countries, or to figures released by companies.

After-hours trading commonly helps indicate the next day’s open. Extended-hours trading in stocks takes place on electronic markets known as ECNs before the financial markets open for the day, as well as after they close.

This activity can help investors predict the open market direction.

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