Indian Equity Market: Domestic equity indexes Sensex and Nifty 50 are expected to open flat with positive swings on Tuesday amid mixed indicators from their global peers.
Asian markets fell but U.S. stocks ended higher overnight, led by gains in large tech stocks.
Reuters reported that U.S. manufacturing PMI data showed a third straight contraction in June and payment prices fell to a six-month low, a positive sign for the Federal Reserve’s efforts to tackle inflation. Traders remain of the view that there will be around two interest rate cuts after September this year, according to LSEG FedWatch.
Indian stock market indexes closed up more than 0.5% each on Monday, led by gains in some financial and IT majors.
The Sensex index rose 443.46 points or 0.56 per cent to close at 79,476.19, while the Nifty 50 index rose 131.35 points or 0.55 per cent to close at 24,141.95.
“The market reversed the earlier trend and moved higher as favourable news from Asia and Europe helped the recovery with buying in banking, IT and telecom stocks. Though there was no negative news on the economic data front, investors are currently keeping a close eye on the choppy monsoon and upcoming budget,” said Prashant Tapse, senior vice president, research at Mehta Equities.
Key global market indications on Sensex today include:
Asian Market
Asian markets fell on Tuesday. Japan’s Nikkei fell 0.41% and the Topix was flat. South Korea’s KOSPI fell 0.22% and the Kosdaq lost 0.39%. Hong Kong’s Hang Seng Index futures opened lower.
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Today’s Gift
GIFT Nifty is trading near the 24,245 level, up nearly 35 points from the previous day’s closing price of Nifty futures, indicating a strong start for Indian stock market indices.
Wall Street
U.S. stocks ended higher on Monday, led by gains in large growth stocks that lifted the tech-heavy Nasdaq.
The Dow Jones Industrial Average rose 50.66 points, or 0.13%, to close at 39,169.52, while the S&P 500 rose 14.61 points, or 0.27%, to close at 5,475.09 and the Nasdaq Composite rose 146.70 points, or 0.83%, to close at 17,879.30.
Apple shares rose 2.9%, Microsoft shares rose 2%, Amazon shares rose 2.2%, Tesla shares surged 6.1%, Advanced Micro Devices shares fell 2.8%, Arm Holdings shares fell 2.9%, and Chewy shares fell 6.7%.
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US PMI
U.S. manufacturing contracted for a third straight month in June. The Institute for Supply Management said its manufacturing PMI fell to 48.5 last month from 48.7 in May. Economists surveyed by Reuters had expected the PMI to rise to 49.1.
Government bond yields
US Treasury yields surged after last week’s presidential debate between Joe Biden and Donald Trump as traders considered the potential economic impact of November’s US elections. The benchmark 10-year Treasury yield rose nearly 14 basis points overnight to 4.479%.
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Dollar
The U.S. dollar surged to a 38-year high against the yen on Monday as U.S. Treasury yields surged. The yen was trading at 161.55 yen to the dollar in Asia on Tuesday after falling to as low as 161.72 yen to the dollar on Monday. The Chinese yuan fell to 7.2705 to the dollar, its lowest since Nov. 14, 2023. The euro was last trading at $1.0735. The dollar index was around 105.85.
Oil prices
Oil prices traded near two-month highs as tensions rose in the Middle East.
Brent crude oil rose 0.14% to $86.72 a barrel, while U.S. West Texas Intermediate (WTI) crude futures rose 0.07% to $83.44.
(Quoted from Reuters)
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