Indian stock market: 7 key things that changed for market over weekend - Gift Nifty, US inflation to oil prices

Indian stock market: The domestic equity market is expected to open higher, with the benchmark indices Sensex and Nifty 50 likely to extend rally, following positive cues from global markets.

Asian markets traded higher, while the US stock market ended with gains last week on rising expectations that the US Federal Reserve will begin cutting interest rates soon.

The meeting of the Federal Reserve’s Federal Open Markets Committee (FOMC) is scheduled on July 30 and 31, with the interest rate decision to be announced on July 31.

US inflation data on Friday increased hopes that the US Fed would begin monetary policy easing in September. Bets on a 25-basis-point cut at the Fed’s September meeting held steady at about 88% after the PCE reading, according to CME’s FedWatch. According to LSEG data, traders still largely expect two rate cuts by December.

On Friday, the Indian stock market benchmark indices ended with robust gains, snapping their five-day losing streak and logged their best session in seven weeks, led by heavy value-buying at lower levels.

The Sensex soared 1,292.92 points, or 1.62%, to close at 81,332.72, while the Nifty 50 settled 428.75 points, or 1.76%, higher at an all-time closing high of 24,834.85.

“Indian markets outperformed its global peers on the back of a strong across-the-board buying support after languishing in negative territory for the past five trading sessions. The sharp rebound signifies that India remains a good long-term bet and the economy continues to show strong resilience in spite of global uncertainty and geo-political tensions. Also, most of the blue chips and mid-cap companies have reported better earnings, which is providing a major impetus to markets,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Market participants will watch out for Q1 results, the upcoming US Fed’s interest rate decision, domestic and global macroeconomic data, flow of foreign funds, trends in crude oil prices, and other key global cues that will drive market movement this week.

Here are key global market cues for Sensex today:

Asian Markets

Asian markets traded higher on Monday ahead of a week of key central bank decisions in Japan, US and UK.

Japan’s Nikkei rallied 2.02%, while the Topix gained 1.52%. South Korea’s Kospi rose 0.8%, while the Kosdaq added 0.48%. Hong Kong Hang Seng index futures indicated a lower opening.

Gift Nifty Today

Gift Nifty was trading around 25,075 level, a premium of nearly 160 points from the Nifty futures’ previous close, indicating a positive start for the Indian stock market indices.

Wall Street

US stock market ended higher on Friday led by buying in megacaps technology stocks and as inflation data boosted optimism of interest rate cuts by the US Fed soon.

The Dow Jones Industrial Average rallied 1.64% to 40,589.34, while the S&P 500 jumped 1.11% to 5,459.10. The Nasdaq Composite Index ended 1.03% higher at 17,357.88.

3M shares surged 23%, while Biogen share price slumped 7.2% and DexCom plunged more than 40%.

US Inflation

US inflation rose moderately in June. The personal consumption expenditures (PCE) price index increased 0.1% last month after being unchanged in May. In the 12 months through June, the PCE price index climbed 2.5% after rising 2.6% in May. Economists polled by Reuters had forecast both monthly headline PCE and core inflation rising 0.1% in June.

China Industrial Profits

China’s industrial profits grew at a faster clip in June. A 3.6% YoY rise in profits last month followed a 0.7% gain in May, while first-half earnings were up 3.5%, accelerating from a 3.4% increase in the January-May period, official data showed.

US Treasury Yields

US 10-year Treasury yields fell to a one-week low on Friday after data showed US prices rose modestly in June. The Benchmark 10-year note yields fell 5.6 basis points (bps) to 4.2% and got as low as 4.19%, the lowest since July 19. Interest rate sensitive two-year note yields were down 5.4 bps at 4.389%.

Oil Prices

Crude oil prices traded higher on Monday from near a six-week low ahead of the OPEC meeting later in the week.

Brent crude gained 0.21% to $81.30 a barrel after falling 1.5% on Friday to notch a third weekly drop, while West Texas Intermediate (WTI) crude rose 0.05% to $77.20.

(With inputs from Agencies)

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