Indian Stock Market: 6 Things That Changed for Market Overnight – Gift Nifty, Oil Prices to US Manufacturing PMI
The domestic equity market in India is expected to open lower on Wednesday, extending the decline from the previous day, due to weak global market cues. Asian markets traded lower, while the US stock market ended mixed overnight. Investors are closely watching the US Federal Reserve meeting minutes and India’s manufacturing PMI data for further cues.
On Tuesday, the Sensex and Nifty 50, the two major domestic equity indices, ended in negative territory. This was fueled by concerns over escalating geopolitical tensions and a significant jump in crude oil prices. The Sensex fell 379.46 points, or 0.53%, to close at 71,892.48, while the Nifty 50 ended 76.10 points, or 0.35%, lower at 21,665.80.
According to Siddhartha Khemka, Head – Retail Research at Motilal Oswal Financial Services Ltd, Markets are witnessing profit booking in January, after 2 consecutive months of sharp up-move. Nifty gained 5% in Nov and 8% in December. Also, investors turn cautious ahead of the FOMC meeting minutes to be released on Wednesday and rising tensions in the Red Sea.
In Asian markets, Japan’s markets are closed until January 4, while South Korea’s Kospi declined by 1.36% and the Kosdaq fell 1%. Hong Kong’s Hang Seng index futures pointed to a weaker open, and Australia’s S&P/ASX 200 fell 1%.
The Gift Nifty was trading around the 21,680 level, indicating a weak start for the Indian stock market today compared to the previous close of Nifty futures at 21,754.
In the US stock market, the indices ended mostly lower on Tuesday, the first trading session of 2024. Technology stocks faced selling pressure amid a rise in Treasury yields. The S&P 500 declined by 27 points, or 0.57%, to end at 4,742.83 points, while the Nasdaq Composite fell 245.41 points, or 1.63%, to 14,765.94. The Dow Jones Industrial Average ended 25.5 points, or 0.07%, higher at 37,715.04.
Notable stocks such as Apple dropped 3.6% after Barclays downgraded the tech giant to underweight, citing weakening iPhone demand. Other companies, including Nvidia, Meta Platforms, and Microsoft, also saw declines between 1.4% and 2.7%.
US manufacturing activity for December, as measured by S&P Global, came in at 47.9, down from 49.4 in November and below the estimates of 48.2.
US Treasury yields rose to two-week highs, indicating lowered expectations for rate cuts in 2024. The yield on 10-year notes ticked above 4.000% to a two-week high before easing slightly to 3.937%.
Crude oil prices ended lower on Tuesday, easing concerns of disrupted supplies in the Red Sea. Brent crude settled at $75.89, down by $1.15 or 1.5%, while US West Texas Intermediate crude ended at $70.38 a barrel, down by $1.27 or 1.8%.
As the domestic and global markets experience volatility, investors remain watchful of key events such as the US Federal Reserve meeting minutes and India’s manufacturing PMI data, which are expected to provide insights into the market’s direction. It remains to be seen how these factors will impact the Indian stock market in the coming days.
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