The Indian stock market is set to open on a muted note on Tuesday, with domestic equity market indices expected to react to mixed cues from global markets. Asian markets traded mostly higher, while the US stock market ended mixed overnight as investors await key economic data this week, especially consumer prices, to gauge the outlook for US Federal Reserve monetary policy.
Money markets are evenly betting on a 25- or 50-basis-point cut in US interest rates in September, expecting a total easing of 100 bps by the end of 2024, as per CME’s FedWatch Tool. On the domestic front, Indian stock market investors will be closely watching the latest retail inflation and factory output data, along with stock-specific actions that may be seen due to the MSCI index August rejig.
On Monday, the Indian stock market benchmark indices, Sensex and Nifty 50, ended marginally lower amid cautious sentiment after the release of the Hindenburg report against Sebi Chief Madhabi Puri Buch in the Adani Group case. The Sensex fell 56.99 points, or 0.07%, to close at 79,648.92, while the Nifty 50 settled 20.50 points, or 0.08%, lower at 24,347.00.
Vinod Nair, Head of Research at Geojit Financial Services, commented on the market’s performance, stating, “The Indian market concluded relatively flat, with its initial path being eclipsed by continuation of the Adani-Hindenburg-SEBI saga. However, the market tried to brush away these noises, taking positive cues from global markets. Moreover, the domestic market is anticipating ease in CPI inflation, which is going to be further supported by a good monsoon. Yet, the upside risk remains, given firm oil prices and volatility in food inflation.”
Key global market cues for the Sensex today include:
Asian Markets: Asian markets traded mostly higher on Tuesday, led by Japanese shares. Japan’s Nikkei 225 index rallied 2.53% to breach 36,000 for the first time since August 2, while the Topix index surged 2.16%. South Korea’s Kospi fell 0.2%, while the Kosdaq declined 1.57%. Hong Kong’s Hang Seng index futures indicated a higher opening.
Gift Nifty Today: Gift Nifty was trading around 24,335 level, a discount of nearly 25 points from the Nifty futures’ previous close, indicating a flat-to-negative start for the Indian stock market indices.
Wall Street: The US stock market ended mixed on Monday ahead of the latest economic data this week. The Dow Jones Industrial Average fell 140.53 points, or 0.36%, to 39,357.01, while the S&P 500 rose 0.23 points to end at 5,344.39 points. The Nasdaq Composite ended 35.31 points, or 0.21%, higher at 16,780.61. Starbucks shares gained 2.58%, KeyCorp stock price jumped 9.1%, while Hawaiian Electric share price plunged 14.45%.
MSCI Index Rejig: Seven stocks, including Vodafone Idea and Rail Vikas Nigam Ltd. (RVNL) shares, will be included in the MSCI India Index as part of the MSCI Global Standard Index in its August reshuffle. Bandhan Bank will be excluded from the index.
India Inflation, IIP Data: India’s retail inflation fell to a 59-month low of 3.5% year-on-year in July, benefiting from a high base effect. The inflation rate has dipped below the Reserve Bank of India’s medium-term target of 4% for the first time in almost five years. India’s factory output growth measured in terms of the Index of Industrial Production (IIP) rose 4.2% in June on an annual basis as against 6.2% in May.
Japan Producer Inflation: Inflation as measured by Japan’s producer prices accelerated in July for the sixth consecutive month. The measure of input prices for Japanese firms gained 3.0% from a year earlier, slightly below economists’ expectations. From the prior month, prices rose by 0.3%, matching the consensus estimate.
Oil Prices: Crude oil prices traded lower, breaking a five-day streak of gains. Global benchmark Brent crude futures dropped 0.5% to $81.89 a barrel, while US West Texas Intermediate crude futures fell 0.5% to $79.63 a barrel.
Currency Market: The dollar was in limbo, while a rally in Japanese stocks helped staunch the bleeding in yen carry trades. The greenback was idling at 147.17 yen, with the euro standing at $1.0931. The dollar index was flat at 103.08.
In conclusion, the Indian stock market is poised for a muted opening on Tuesday, with investors closely monitoring global market cues and key economic data. The market’s performance will be influenced by factors such as inflation data, MSCI index rejig, and global market trends. It is essential for investors to stay informed and seek advice from certified experts before making any investment decisions.