Indian stock market: The Indian equity market indices, Sensex and Nifty 50, are expected to open lower on Friday following weakness in global markets and as investors watch out for the Reserve Bank of India’s (RBI) monetary policy announcement later today.
Asian markets traded lower, while US stock market indices ended sharply lower overnight after comments from US Federal Reserve officials raised worries that the central bank could hold off on rate cuts.
Crude oil prices surging to six-month highs, with the global benchmark Brent oil surpassing $90 a barrel level, may also dent investor sentiment.
Meanwhile, RBI Governor Shaktikanta Das is set to announce the interest rate decision of the Monetary Policy Committee (MPC) later today. Market participants expect the RBI to maintain policy repo rates unchanged while projecting a rate cut in the second half of the current financial year.
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On Thursday, the Indian stock market indices ended higher, snapping a two-day losing run, ahead of the RBI monetary policy decision.
The Sensex gained 350.81 points, or 0.47%, to close at 74,227.63, while the Nifty 50 settled 80.00 points, or 0.36%, higher at 22,514.65.
“Nifty has been consolidating in a narrow range at higher levels for the last few sessions, while broader markets have bounced back strongly, especially after a sharp recent correction. We expect some volatility today especially in the rate sensitive sector amid India’s central bank’s policy meeting. Overall, we maintain our positive bias on the market, and any dip can be viewed as a buying opportunity,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Here are key global market cues for Sensex today:
Asian Markets
Asian markets traded lower on Friday tracking overnight losses on Wall Street.
Japan’s Nikkei 225 declined 1.59%, while the Topix fell 1.15%. South Korea’s Kospi dropped 0.79% and the Kosdaq dripped 0.84%. Hong Kong’s Hang Seng index futures were indicating a mildly positive start after a trading holiday.
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Gift Nifty Today
Gift Nifty was trading around the 22,556 level, a discount of nearly 55 points from the Nifty futures’ previous close, indicating a gap-down start for the Indian stock market indices.
Wall Street
The US stock market indices ended over a percent lower each on Thursday, with the S&P 500 seeing the biggest daily percentage drop since February 13, after US Federal Reserve officials took a cautious approach in comments on the outlook for interest rate cuts.
The Dow Jones Industrial Average plunged 530.16 points, or 1.35%, to 38,596.98, while the S&P 500 declined 64.28 points, or 1.23%, to 5,147.21. The Nasdaq Composite ended 228.38 points, or 1.4%, lower at 16,049.08.
Investors await the monthly jobs data scheduled to be released on Friday which could hold more clues on the labor market and inflation.
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US Trade Deficit
The US trade deficit widened for a second straight month in February. The trade deficit increased 1.9% to $68.9 billion. Data for January was revised slightly to show the trade gap rising to $67.6 billion instead of $67.4 billion as previously reported. Economists polled by Reuters had forecast the deficit little changed at $67.3 billion in February.
Fed Officials
Minneapolis Federal Reserve Bank President Neel Kashkari said that no interest rate cuts would be required if inflation continues to stall, as against the two interest rate cuts he penciled this year in the US central bank’s meeting last month, Reuters reported.
“If we continue to see inflation moving sideways, then that would make me question whether we need to do those rate cuts at all,” Kashkari said during an interview with Pensions & Investments.
Earlier, Richmond Federal Reserve President Thomas Barkin said he is focused intently on the persistent breadth of inflation across goods and services and feels slower price increases need to be more widespread before he is comfortable cutting interest rates.
US Weekly Jobless Claims
The number of Americans filing new claims for unemployment benefits increased to a two-month high last week. Initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 221,000 for the week ended March 30. Economists polled by Reuters had forecast 214,000 claims in the latest week.
Exchange-traded forex derivatives rules
The RBI extended the deadline for implementing its new rules on exchange-traded rupee derivatives contracts to May 3 from April 5 earlier, saying that the central bank’s policy on this issue has remained unchanged over the years.
Read here: RBI defers directive for exchange traded currency derivatives to May 3
Oil Prices
Crude oil prices extended gains amid escalating tensions in the Middle East, rising above $90 a barrel for the first time since October.
Brent crude oil gained 0.55% to $91.15 a barrel, while the US West Texas Intermediate (WTI) crude futures rose 0.45% to $86.98.
(With inputs from Reuters)
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