Indian Equity Market: The domestic equity market is expected to open flat on Wednesday following mixed cues from global equity markets.
Asian markets were mostly lower while US stocks were mixed overnight, with the S&P 500 and Nasdaq closing at record highs.
Federal Reserve Chairman Jerome Powell told lawmakers in congressional testimony that more “good” economic data would strengthen the case for lowering interest rates. He acknowledged rising inflation and a weakening job market but gave no clear signal that interest rates would be cut.
According to CME’s FedWatch, the market continues to price in 50 basis points of easing this year, with a nearly 72% chance of a 25 basis point rate cut by the Fed’s September meeting.
India’s major stock market indexes hit fresh record highs and closed higher on Tuesday, led by gains in auto stocks.
The Sensex index rose 391.26 points or 0.49 percent to close at 80,351.64, while the Nifty 50 index rose 112.65 points or 0.46 percent to close at 24,433.20.
“We expect the market to trade with a positive bias and take cues from upcoming inflation data, Q1FY25 earnings and the Budget. The pharma sector is likely to remain in focus in the coming days on the back of favorable valuations and expectations of healthy earnings growth in Q1,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.
Key global market indications on Sensex today include:
Asian Market
Asian markets were mixed following inflation data from China and Japan.
Japan’s Nikkei Stock Average fell slightly while the Topix was flat. South Korea’s KOSPI fell 0.25% and the Kosdaq lost 0.2%. Hong Kong’s Hang Seng Index futures opened higher.
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GIFT Nifty was trading near the 24,485 level, up nearly seven points from the previous day’s close of Nifty futures, signalling a flat start for the Indian equity market index.
Wall Street
U.S. stock markets ended mixed on Tuesday, with the S&P 500 and Nasdaq closing at record highs.
The Dow Jones Industrial Average fell 0.13% to close at 39,291.97, while the S&P 500 rose 0.07% to 5,576.98. The Nasdaq rose 0.14% to close at 18,429.29, hitting a record high for the sixth consecutive day.
Nvidia shares rose 2.5%, Microsoft shares fell 1.4%, and Tesla shares rose 3.7%. JPMorgan and Wells Fargo shares rose more than 1%, Citi shares rose 2.8%, and Tempus AI shares rose nearly 4%.
Jerome Powell
Federal Reserve Chairman Jerome Powell told Congress that the U.S. economy is “no longer overheating” and that the job market has “cooled significantly” from the extremes of the pandemic era, according to Reuters. “We are well aware that we now face risks on both sides,” Powell told the Senate Banking Committee, adding that the focus can no longer be solely on inflation, which is still “surpassing” the central bank’s 2% target.
Japan Wholesale Price Index
Japan’s wholesale price index accelerated in June as a weaker yen pushed up the cost of imported raw materials. Bank of Japan data showed the Corporate Goods Price Index (CGPI) rose 2.9% year-on-year in June, in line with the median forecast for the month and accelerating from a revised 2.6% increase in the previous month, Reuters reported. The index rose 9.5% year-on-year in June, accelerating from a revised 7.1% increase in May.
Dollar
The dollar rose on Wednesday after Federal Reserve Chairman Powell sounded cautious about the timing of any interest rate cuts.
The dollar index, which tracks the greenback’s relative value against six major currencies including the euro and yen, rose 0.3% to 105.15, after rising about 0.1% on Tuesday. It had fallen to 104.80 on Monday, its lowest since June 13.
U.S. Treasury Yields
U.S. Treasury yields rose on Tuesday after Federal Reserve Chairman Jerome Powell delivered a less-than-dovish tone in testimony before Congress.
The yield on the 10-year U.S. Treasury note rose 2.5 basis points to 4.293%, while the 30-year note rose 3.1 basis points to 4.489%. The three-year note rose slightly to 4.402% and the two-year note was flat to slightly higher at 4.622%.
Oil prices
Oil prices rose on Wednesday, rebounding after three days of declines, after reports that U.S. crude and fuel inventories fell last week.
Brent crude futures rose 0.25% to $84.87 a barrel after a 1.3% drop the previous day. U.S. West Texas Intermediate (WTI) crude rose 0.32% to $81.67 a barrel after a 1.1% drop the previous day.
(Quoted from Reuters)
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