Indian Markets Brace for Cautious Opening
The Indian stock market is preparing for a cautious opening on Wednesday as global market weakness casts a shadow over investor sentiment. Benchmark indices Sensex and Nifty 50 are expected to begin trading on a tepid note, mirroring the downward trend observed in international markets.
Global Market Pressure Weighs on Sentiment
Asian markets displayed mostly negative trends during early trading hours, following significant overnight losses in US markets. Japan's Nikkei 225 index slipped 0.06%, while the Topix index declined 0.26%. South Korea's Kospi experienced a more substantial drop of 1.26%, with the Kosdaq falling 1.02%. The only glimmer of optimism came from Hong Kong's Hang Seng Index futures, which indicated a potential higher opening.
The Gift Nifty, often considered an early indicator of Indian market direction, was trading around the 25,945 level. This represents a discount of nearly 4 points from the Nifty futures' previous close, suggesting a flat to negative start for domestic indices.
Wall Street Decline Sets Negative Tone
US stock markets concluded Tuesday's session with significant losses, primarily driven by selling pressure in technology stocks. The Dow Jones Industrial Average plummeted 498.50 points, or 1.07%, to settle at 46,091.74. The S&P 500 dropped 55.09 points, or 0.83%, closing at 6,617.32, marking its fourth consecutive day of losses - the longest losing streak in three months.
The technology-heavy Nasdaq Composite suffered the most substantial blow, declining 275.23 points, or 1.21%, to finish at 22,432.85. Major technology stocks led the downturn with Nvidia shares falling 2.8%, Microsoft declining 2.7%, and Amazon plunging 4.43%. Advanced Micro Devices (AMD) dropped 4.25%, while Home Depot stock tanked 6%.
Domestic Market Performance and Expert Outlook
On Tuesday, the Indian stock market snapped its six-day winning streak, with both major indices closing in negative territory. The Sensex declined 277.93 points, or 0.33%, to close at 84,673.02, while the Nifty 50 settled 103.40 points, or 0.40%, lower at 25,910.05.
Ajit Mishra, SVP of Research at Religare Broking Ltd, provided crucial insights for investors navigating the current market conditions. "We expect further consolidation to persist, which would be healthy as long as the Nifty 50 holds above its key short-term support - the 20-DEMA, which currently lies around 25,700," Mishra stated.
He emphasized that market participants should continue prioritizing stock selection based on relative strength across sectors, with a preference for large-cap and stronger mid-cap names while maintaining a measured approach amid the prevailing choppiness.
Commodities and Currency Markets
In commodity markets, gold prices remained steady as investors awaited minutes from the Federal Reserve's latest policy meeting and US jobs data. Spot gold price was flat at $4,069.44 per ounce, while US gold futures for December delivery edged 0.1% higher to $4,069.50 per ounce.
Crude oil prices traded over half a percent lower, with Brent crude oil prices falling 0.54% to $64.54 a barrel. The US West Texas Intermediate (WTI) crude futures declined 0.54% to $60.41.
The dollar held gains against the yen after reaching a 9-1/2-month high, with the dollar index up 0.04% at 99.59.
India-US Trade Relations Remain Strong
On the international trade front, Union Commerce Minister Piyush Goyal expressed confidence in the India-US partnership, stating that the relationship remains strong and continues to expand across various sectors. Regarding the proposed India-US trade deal, Goyal confirmed that negotiations were progressing and assured that India would only sign an agreement that is fair, balanced, and protects national interests.
As Indian investors prepare for Wednesday's trading session, market experts recommend cautious optimism and strategic stock selection to navigate the current global market volatility effectively.
