Indian Equity Market: Domestic benchmark equity indexes Senex and Nifty are expected to open higher on Friday following mixed global market cues and developments with Senex Nifty.
Asian markets rose but U.S. stock indexes ended the overnight session lower, weighed down by selling in technology shares.
Investors digested U.S. GDP data that showed economic growth in the first quarter slower than previously expected, as well as a stronger-than-expected rise in weekly jobless claims.
The likelihood that the Federal Reserve will cut interest rates by at least 25 basis points in September has risen to 50.4% from 48.7% before the data was released, according to CME Group’s FedWatch tool.
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Benchmark indices of the Indian equity market on Thursday suffered heavy selling amid monthly F&O expiry and ended down about 1 per cent each, extending losses for the fifth consecutive trading day.
The Sensex index fell 617.30 points or 0.83 percent to close at 73,885.60, while the Nifty 50 index fell 216.05 points or 0.95 percent to close at 22,488.65.
“Anxiety ahead of the exit polls and weak signals from the global economy continue to weigh on sentiment. Global markets remain under pressure due to rising bond yields and fading expectations of rate cuts. We expect market volatility to increase as the general election results near,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services.
Key global market indications on Sensex today include:
Asian Market
Asian markets rose on Friday as investors focused on key economic data across the region.
Japan’s Nikkei rose 0.23% and the TOPIX gained about 0.7%. South Korea’s KOSPI rose 1.07% and the KOSDAQ added 0.73%. Hong Kong’s Hang Seng Index futures opened lower.
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Give the gift of Nifty today
GIFT Nifty is trading near the 22,700 level, up nearly 70 points from the previous day’s closing price of Nifty futures, indicating a strong start for Indian stock market indices.
Wall Street
US stock markets ended lower on Thursday, with the Nasdaq dropping more than 1% hit by selling and tech shares.
The Dow Jones Industrial Average fell 330.06 points, or 0.86%, to 38,111.48, the S&P 500 lost 31.47 points, or 0.60%, to 5,235.48 and the Nasdaq Composite Index lost 183.50 points, or 1.08%, to 16,737.08.
On the stock market, Salesforce shares plunged 19.7%, while Dell Technologies shares fell more than 12% after the close.
In regular trading, HP shares rose 17% and Tesla shares rose 1.5% after the company reported better-than-expected second-quarter earnings. Best Buy shares rose 13.4%, while Kohl’s plunged 22.9%.
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US GDP
The U.S. economy grew more slowly than previously expected in the first quarter after downward revisions to consumer spending and a decline in a key measure of inflation. Gross domestic product grew at an annualized rate of 1.3% from January to March, below the flash estimate of 1.6% and much slower than the 3.4% growth rate in the final three months of 2023.
Unemployment claims
The number of Americans filing new claims for unemployment benefits rose slightly last week. New state unemployment claims rose by 3,000 to a seasonally adjusted 219,000 for the week ended May 25. Economists polled by Reuters had expected claims to be 218,000 for the latest week.
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Federal Reserve Board (FRB) officials
Federal Reserve policymakers continue to expect inflation to fall this year and are in no rush to cut interest rates.
Dallas Fed President Rory Logan said Thursday he remains concerned about the risk of rising inflation and warned that the U.S. central bank needs to remain “flexible” and “consider all options” as it monitors the data and decides how to respond.
“It’s really important that we don’t commit ourselves to a particular path on monetary policy,” Logan said at the event, adding, “I think it’s premature to be thinking seriously about cutting interest rates.”
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China PMI
China’s manufacturing activity unexpectedly fell in May, an official factory survey showed. The official Purchasing Managers’ Index (PMI) fell to 49.5 in May from 50.4 in April, below the 50 mark that separates growth from contraction and below the median forecast of 50.4 in a Reuters poll.
Oil prices
Oil prices fell after an unexpected rise in U.S. gasoline inventories and comments from Federal Reserve officials that it was too early to consider cutting interest rates.
Brent crude futures were down 0.16% to trade at $81.73 a barrel, while US West Texas Intermediate (WTI) crude was down 0.24% to $77.72.
Dollar
Reuters reported that the dollar fell against other currencies on Friday after a downward revision of U.S. GDP figures suggested there was room for an interest rate cut this year. The dollar index, which tracks the dollar’s relative value against six major currencies, was last trading around 104.76 after dropping to 104.63 overnight.
(Quoted from Reuters)
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