Indian stock market: The domestic equity benchmark indices, Sensex and Nifty 50, are expected to open lower on Monday tracking weak cues from global peers.
Asian markets traded lower, while the US stock market ended in the red on Friday amid uncertainty over the global technical outage.
Markets are likely to react to the news that Joe Biden dropped out of the US presidential election and endorsed Vice President Kamala Harris as the new nominee.
On Friday, the Indian stock market benchmark indices cracked a percent each dragged by across the board selling amid weak global cues.
The Sensex plunged 738.81 points, or 0.91%, to close at 80,604.65, while the Nifty 50 settled 269.95 points, or 1.09%, lower at 24,530.90.
“Overall markets got impacted due to new tensions between US and China which resulted in global profit booking. In addition, the Microsoft outage impacted a lot of large organizations, airlines, and stock exchanges globally. Investors are also cautious ahead of the Union Budget tomorrow which will provide the next set of directions to the market. Earnings season will also pick up pace which will result in stock specific actions,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Investors will watch out for the Economic Survey ahead of the Union Budget and other related or government policy announcements, the next set of Q1 results, domestic and global macroeconomic data, flow of foreign funds, trends in crude oil prices, and other key global cues that will drive market movement this week.
Here are key global market cues for Sensex today:
Asian Markets
Asian markets traded lower on Monday amid news of US President Joe Biden dropping out of the presidential race and as investors look out for the People’s Bank of China’s loan prime rate decision.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.2%, having shed 3% last week. Japan’s Nikkei 225 fell 0.5%, while the Topix declined 0.41%. South Korea’s Kospi dropped 0.16%, while the Kosdaq fell 0.39%. Hong Kong’s Hang Seng index indicated a marginally higher opening.
Gift Nifty Today
Gift Nifty was trading around 24,401 level, a discount of nearly 135 points from the Nifty futures’ previous close, indicating a negative start for the Indian stock market indices.
Wall Street
US stock market slumped Friday as the global technical outage caused by a software glitch added uncertainty to an already-anxious market.
The Dow Jones Industrial Average declined 377.49 points, or 0.93%, to 40,287.53, while the S&P 500 fell 39.59 points, or 0.71%, to 5,505. The Nasdaq Composite ended 144.28 points, or 0.81%, lower at 17,726.94.
Crowdstrike shares plunged 11.1%, while Palo Alto Networks share price and SentinelOne share price gained 2.2% and 7.8%, respectively. Eli Lilly shares rose 1% and Intuitive Surgical stock price jumped 9.4%. Travelers tumbled 7.8% and Netflix shares fell 1.5%.
US Elections
Joe Biden dropped out of the US presidential election and endorsed Vice President Kamala Harris as the Democratic Party’s new nominee, in the 2024 race for the White House.
People’s Bank of China
China’s central bank cut benchmark lending rates at a monthly fixing after it lowered a key short-term policy rate earlier in the session, Reuters reported. The People’s Bank of China reduced the one-year loan prime rate (LPR) by 10 basis points to 3.35% from 3.45% previously, while the five-year LPR was cut by the same margin to 3.85% from 3.95%.
Reliance Q1 Results
Reliance Industries Ltd reported a consolidated net profit to ₹15,138 crore for the fiscal first quarter ended June 2024, a decline of 5.4% year-on-year (YoY). The company’s revenue from operations in Q1FY25 increased 11.5% YoY to ₹2.36 lakh crore led by contributions across segments. Consolidated EBITDA rose 2% YoY to ₹42,748 crore as strong contributions from Oil & Gas and consumer businesses offset weak O2C.
Dollar
The dollar eased after US President Joe Biden decided to end his reelection campaign. The US currency slipped 0.08% to 157.38 yen in early Asian trade, while the euro gained 0.11% to $1.0895, Reuters reported. The dollar was steady at 7.2881 yuan in offshore trading.
US Treasury Yields
US Treasury yields rose on Friday. Interest rate sensitive two-year yields rose 4.8 basis points to 4.509% and the benchmark 10-year yields gained 5.1 bps to 4.239%.
The surge in futures and options (F&O) trading volume has become a macro issue and not just a micro issue of investor safety, Securities and Exchange Board of India (SEBI) Chairperson Madhabi Puri Buch said. “Time to consider if household savings are going into speculation instead of capital formation,” she said.
Oil Prices
Crude oil prices traded higher on Monday after slumping almost 3% on Friday.
Global benchmark Brent rose 0.57% to $83.10 a barrel, while West Texas Intermediate gained 0.52% to $80.55.
(With inputs from Reuters)
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
