Indian stock market: The domestic equity indices, Sensex and Nifty, are expected to open lower on Friday following weakness in global markets.
Asian markets fell while the US stock market ended lower overnight after higher-than-estimated US producer prices suggested that the US Federal Reserve could reduce the number of rate cuts this year.
The US Fed is expected to leave rates unchanged at its policy meeting next week. The market has trimmed the odds of a cut of at least 25 basis points at its June meeting to 62.9%, CME’s FedWatch Tool showed, down from 81.7% a week ago, Reuters reported.
On Thursday, the Indian stock market indices rebounded sharply to end higher led by buying in metals and energy stocks with mid and smallcap indices outperforming the frontliners.
The Sensex gained 335.39 points, or 0.46%, to close at 73,097.28, while the Nifty 50 settled 148.95 points, or 0.7%, higher at 22,146.65.
“We expect broader market volatility to continue in the near term, thus, retail investors should take this correction as an opportunity to accumulate quality names in 3-4 tranches. We suggest to make a higher allocation towards largecaps as valuations are comfortable along with steady growth prospects,” 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 after a hot US inflation report.
Japan’s Nikkei 225 declined 0.4%, while the Topix gained 0.3%. South Korea’s Kospi fell around 1% and Kosdaq dropped 0.9%. Hong Kong’s Hang Seng index futures indicated a lower opening.
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Gift Nifty Today
Gift Nifty was trading around 22,130 level, a discount of over 100 points from the Nifty futures’ previous close, indicating a gap-down start for the Indian stock market indices.
Wall Street
US stock market indices ended lower on Thursday dragged by selling in chipmaker stocks for a second day, and after a jump in producer prices.
The Dow Jones Industrial Average declined 137.66 points, or 0.35%, to 38,905.66, while the S&P 500 fell 14.83 points, or 0.29%, to 5,150.48. The Nasdaq Composite ended 49.24 points, or 0.3%, lower at 16,128.53.
Among stocks, Nvidia shares dropped 3.2%, while Robinhood Markets share price gained 5.2%.
US PPI Data
US producer prices increased more than expected in February amid a surge in the cost of goods like gasoline and food. The producer price index for final demand rose 0.6% last month after advancing by an unrevised 0.3% in January. Economists polled by Reuters had forecast the PPI climbing 0.3%. The gauge rose 1.6% from a year earlier, the largest annual advance since September.
US Retail Sales
US retail sales rebounded less than expected in February, suggesting a slowdown in consumer spending in the first quarter. Retail sales rose 0.6% last month. Data for January was revised lower to show sales tumbling 1.1% instead of the previously reported 0.8%, while sales in December were also downgraded. Economists polled by Reuters had forecast retail sales would rise 0.8% in February. They increased 1.5% on a year-on-year basis in February.
US Treasury Yields
US government bond yields climbed to the highest levels in more than a week after the producer prices data weighed on the outlook for Federal Reserve interest-rate cuts this year.
The yield on the benchmark 10-year note rose 10 basis points (bps) to 4.29%, the highest level since March 1, while the yield on 30-year bonds also rose nearly 10 bps to 4.44%.
Dollar
The US dollar rose on Thursday, boosted by hotter-than-expected producer prices data, Reuters reported. The dollar index, which gauges the currency against six major peers, was last up 0.6% at 103.36. For the week, the index was up 0.6%, on pace for its largest weekly gain since mid-January.
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Oil prices
Crude oil prices edged lower on Friday but were on track to gain nearly 4% for the week.
Brent crude oil futures for May fell 0.5% to $85.01 a barrel, after crossing $85 a barrel for the first time since November on Thursday. US West Texas Intermediate (WTI) crude for April fell 0.4% to $80.94, after jumping 4.8% over the previous two sessions.
(With inputs from Reuters)
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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