The Indian stock market indices Nifty 50 and Sensex today are expected to open on a flat note Wednesday amid mixed domestic and global cues.
The Asian markets traded higher, while the US stocks ended in the green overnight amid a retreat in US Treasury yields.
Meanwhile, investors sought more clarity on interest rates from the US Federal Reserve after the commentary from Fed officials was more hawkish.
On Tuesday, the domestic equity indices snapped their three-day winning run to end marginally lower on profit booking amid weak global cues as optimism around the end of monetary tightening faded.
The Sensex ended 16.29 points, 0.03%, lower at 64,942.40, while the Nifty 50 closed down 5.05 points, or 0.03%, at 19,406.70.
“Market has shown resilience at lower levels, despite a subdued global environment. We expect the market to gradually move upwards given a strong Indian economy and healthy earnings season,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.
Investors now await US Federal Reserve Chairman Jerome Powell’s commentary scheduled on Thursday for future direction, while China’s CPI data would also be closely watched.
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Here are key global market cues for Sensex today:
Asian Markets
Asian markets traded higher on Wednesday following overnight gains on Wall Street as US Treasury yields dropped and crude oil prices declined to a three-month low.
Japan’s Nikkei 225 rose 0.57% and the Topix gained 0.14%. South Korea’s Kospi rallied 0.72%, while the Kosdaq was up 0.30%.
Hong Kong’s Hang Seng index futures was higher at 17,727 compared to the previous close of 17,670.16.
Australia’s S&P/ASX 200 gained 0.31%.
Gift Nifty was trading around 19,489 level as against Nifty futures’ previous close of 19,480, indicating a flat-to-positive start for the Indian benchmark indices.
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Wall Street
US stock market indices ended higher on Tuesday, with the S&P 500 and Nasdaq notching their longest gaining streak in two years, amid a retreat in US Treasury yields.
The Dow Jones Industrial Average gained 56.94 points, or 0.17%, to 34,152.8, while the S&P 500 rose 12.40 points, or 0.28 %, to end at 4,378.38. The Nasdaq Composite ended 121.08 points, or 0.90%, higher at 13,639.86.
Among stocks, Microsoft shares gained 1.1%, Apple share price rose 1.5% and Amazon stock price rallied 2.1%.
Uber Technologies rose 3.7% after the ride-hailing firm projected fourth-quarter adjusted core profit above estimates. Datadog surged 28% after raising its forecast for annual adjusted profit and revenue, Reuters reported.
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Hawkish US Fed Officials
Third-quarter US GDP growth rate at 4.9% was a “blowout” performance that warrants “a very close eye when we think about policy going forward,” US Federal Reserve Governor Christopher Waller said.
Fed Governor Michelle Bowman said she continues to expect that “we will need to increase the federal funds rate further.”
Dallas Fed President Lorie Logan said, “We’re going to continue to need to see tight financial conditions in order to bring inflation to 2% in a timely and sustainable way.”
Oil prices fall to three-month low
Crude oil prices fell more than 4% on Tuesday to their lowest since late July, as mixed Chinese economic data and rising OPEC exports eased fears about tight markets. Stronger dollar also weighed on oil prices.
Read here: Oil prices fall as fresh demand concerns outweigh supply cuts; Brent at $82/bbl
Brent crude futures, the global benchmark, plunged $3.57, or 4.2%, to $81.61 a barrel, while US West Texas Intermediate crude futures ended $3.45, or 4.3%, lower at $77.37 a barrel.
Soft landing can trigger 10% rally in global stocks, says HSBC
Global equities are poised for a double-digit rally in 2024 if the Federal Reserve pivots its monetary policy and allows the economy to avoid a recession, according to HSBC Holdings Plc strategists, Bloomberg reported
“If the Fed can engineer a soft landing, this would imply notable upside for equities,” a team led by Alastair Pinder wrote in a note.
The strategists expect the FTSE All-World Index to end next year at 480, implying upside of nearly 10% from Tuesday’s level.
(With inputs from Agencies)
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