The Indian stock market indices Nifty 50 and Sensex today are expected to open higher following strong global cues.
The Asian markets traded higher following last week’s rally in US stocks as investors’ risk appetite improved on hopes that the US Federal Reserve will not hike interest rates further.
Investors will now await US Fed Chair Jerome Powell’s speech for future guidance on interest policy. Among other stock market triggers for the domestic markets during this week include the ongoing second quarter results of current fiscal, domestic and global macroeconomic data, foreign capital inflow and global market cues.
The domestic equity benchmark indices ended higher for the second consecutive session on Friday amid positive global cues as improved risk appetite.
The BSE Sensex closed 282.88 points, or 0.44%, higher at 64,363.78, while the Nifty 50 gained 97.35 points, 0.51%, to settle at 19,230.60.
Also Read: Week Ahead: Q2 results, FII activity, global cues among key market triggers this week
“Markets are likely to consolidate with a positive bias. The Q2FY24 corporate earnings have so far been in line, with BFSI and Automobiles driving the aggregate. The spread of earnings has been decent. However, the margin tailwinds are likely to moderate in 2HFY24 with base effect coming into play and pick-up in some commodity prices. Given the ongoing result season, sector and stock specific action will continue,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Here are key domestic and global market cues for Sensex today:
Asian Markets
Asian markets traded higher tracking Friday’s rally in US stocks and bonds amid increased bets of no more interest rate hikes.
The MSCI’s broadest index of Asia-Pacific shares outside Japan gained 0.5%, having already rallied 2.8% last week and away from one-year lows.
Japan’s Nikkei 225 rallied 2% and the Topix gained 1.45% to its highest level in over one month. South Korea’s Kospi surged 2.14%, while the Kosdaq jumped 3.39%.
Hong Kong’s Hang Seng index futures were higher at 17,867 compared with the HSI’s close of 17,664.12.
Australia’s S&P/ASX 200 rose 0.40%.
Gift Nifty was trading at around 19,445 level as against Nifty futures’ previous close of 19,296, indicating a positive start for the Indian benchmark indices.
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Wall Street
The US stock market indices ended higher on Friday as bond yields fell sharply after data showed signs of slowing US jobs growth and an uptick in unemployment, resurfacing hopes that the interest rate hike cycle is near its peak.
The Dow Jones Industrial Average rallied 222.24 points, or 0.66%, to 34,061.32, while the S&P 500 gained 40.56 points, or 0.94%, to 4,358.34. The Nasdaq Composite ended 184.09 points, or 1.38%, higher at 13,478.28.
Also Read: Wall Street week ahead: Investors eye Fed survey on banking conditions, US trade deficit data
US jobs data
US job growth slowed in October, while the increase in annual wages was the smallest in nearly 2-1/2 years, pointing to an easing in labor market conditions, Reuters reported.
The Labor Department’s employment report also showed the unemployment rate rising to 3.9% last month, the highest level since January 2022, from 3.8% in September.
Nonfarm payrolls increased by 150,000 jobs last month after rising by 297,000 in September. Economists polled by Reuters had forecast payrolls would rise by 180,000.
Japan service activity posts slowest growth this year
Japan’s services activity expanded at the slowest pace this year in October, a business survey showed.
The final au Jibun Bank Service purchasing managers’ index (PMI) fell to 51.6 in October from 53.8 in September, beset by weak demand, Reuters reported.
The index was slightly above the flash reading of 51.1 and remained over the 50.0 threshold separating expansion from contraction, according to the survey compiled by S&P Global Intelligence.
South Korea re-imposes stock short-selling ban
South Korea has re-imposed a ban on short-selling shares from Monday until at least June to promote a “level playing field” for retail and institutional investors, financial authorities said.
The ban was lifted in May 2021 for trades involving the shares of companies with large market capitalisation included in the KOSPI200 and KOSDAQ150 share price indices. The restriction has remained in place for most other stocks, Reuters reported.
Read here: South Korea to reinstate stock short-selling ban until June 2024 to ‘level playing field’
“The measure is aimed at fundamentally easing’’the tilted playing field’ between institutional and retail investors,” Financial Services Commission (FSC) Chairman Kim Joo-hyun said.
Dollar eases, bond yields drop
The US dollar eased while other major global currencies were steady early on Monday after the Federal Reserve’s dovish tone.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was flat at 105.11. The dollar index declined more than 1% last week, its heaviest fall since mid-July and hit a six-week low.
The euro was at $1.0726, Japanese yen weakened 0.16% to 149.60 per dollar, while the Sterling was steady at $1.2368.
Treasury yields slumped last week after softness in US jobs and manufacturing data. Yields on 2-year notes have dropped 25 basis points in roughly two weeks, while 10-year yields are down half a percentage point and at 5-week lows around 4.59%.
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