The Indian stock market is a dynamic and ever-changing environment that is influenced by a variety of factors, both domestic and global. The two key indices, Sensex and Nifty 50, are closely watched indicators of the market’s performance and are often used as benchmarks for investors and analysts.
On Wednesday, the domestic equity market indices are expected to open higher, following a positive momentum in global markets. Asian markets traded higher, and the US stock market rallied overnight after soft economic data reinforced bets of an interest-rate cut by the US Federal Reserve in September. Traders are now seeing a higher chance of a rate cut by the US central bank, which has implications for global markets, including India.
On Tuesday, the Indian stock market indices ended sharply lower amid foreign fund outflows and mixed trends in global markets. The Sensex dropped 692.89 points, or 0.87%, to close at 78,956.03, while the Nifty 50 settled 208.00 points, or 0.85%, lower at 24,139.00. This decline was attributed to global headwinds surrounding geopolitical uncertainty and cautiousness ahead of US inflation data.
Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd., commented on the market’s performance, stating that investors should use the current dip as a buying opportunity in quality stocks, especially large-caps where valuations are still comfortable.
In terms of global market cues for the Sensex, Asian markets traded higher on Wednesday, following an overnight rally on Wall Street. Japan’s Nikkei 225 gained 0.98%, while the Topix rose 0.72%. South Korea’s Kospi rallied 1.1%, and Hong Kong’s Hang Seng index indicated a higher opening.
The Gift Nifty was trading around 24,235 level, indicating a positive start for the Indian stock market indices. In the US, the stock market ended higher on Tuesday, with the Dow Jones Industrial Average rallying 408.63 points, or 1.04%, to 39,765.64. The S&P 500 and Nasdaq Composite also closed higher, driven by softer producer prices data that increased bets of a Fed rate cut.
US producer prices increased less than expected in July, with the producer price index for final demand gaining 0.1% last month. Crude oil prices rose on estimates about shrinking US crude and gasoline inventories, with Brent crude futures rising to $81.09 a barrel.
US Treasury yields fell in line with speculation of monetary policy easing, and the dollar remained on the back foot after tumbling versus major peers overnight. The dollar index was steady at 102.63, with the euro and yen holding steady against the dollar.
Overall, the Indian stock market is influenced by a complex interplay of domestic and global factors, and investors should stay informed about key market cues to make informed investment decisions. As always, it is advisable to consult with certified experts before making any investment decisions.