Global markets are moving into a relief phase as geopolitical tensions ease and crude oil prices retreat to pre-conflict levels. The sharp decline in oil prices has eased fears of inflation and interest rate hikes, while technology and semiconductor stocks are driving gains across major markets. Gold, meanwhile, has slipped below the $4,000-an-ounce mark amid concerns over higher US interest rates.
Indian markets are expected to open higher today after the Reserve Bank of India Governor indicated there is no need for an interest rate increase at present. The rupee is also likely to strengthen further.
Gift Nifty closed at 24,098 on Wednesday night and rose to 24,136 this morning, signalling a positive start for domestic equities.
Discussions between US trade representative Jamieson Greer and Commerce Minister Piyush Goyal on a bilateral trade agreement ended without a breakthrough. The current 10 percent tariff arrangement expires on July 24. Thereafter, a 12.5 percent tariff under the Super 301 provisions could come into effect.
India fears such a move would place its exporters at a disadvantage compared with competitors such as Indonesia, Bangladesh and Vietnam. New Delhi is seeking clarity on tariff rates before concluding any agreement and may prefer to wait until after the US elections, hoping for a more favourable negotiating environment.
The India Meteorological Department reported that southwest monsoon rainfall was 41.6 percent below normal as of June 24. Around 71 percent of the country has recorded rainfall deficits exceeding 20 percent, while key agricultural regions have received 40-90 percent less rainfall than usual.
US markets closed on a mixed note on Wednesday. Weakness in technology stocks dragged the Nasdaq and S&P 500 lower, while falling crude prices supported the Dow Jones Industrial Average.
The Dow Jones gained 182.06 points, or 0.35 percent, to close at 51,848.90. The S&P 500 slipped 7.24 points, or 0.10 percent, to 7,358.22, while the Nasdaq Composite fell 110.40 points, or 0.43 percent, to 25,476.64.
US memory-chip maker Micron delivered results that exceeded expectations, with revenue quadrupling and data-centre business revenue rising sevenfold. The company reported earnings per share of $25.11 and an industry-leading profit margin of 85 percent.
Micron shares jumped 16 percent in futures trading. Qualcomm surged 15 percent after raising its revenue outlook, while Seagate, Western Digital and SanDisk also advanced sharply.
Nasdaq futures climbed more than 2 percent and moved above 30,000. S&P futures gained 0.49 percent, while Dow futures edged up 0.03 percent.
Asian markets traded higher on Thursday. Japan's Nikkei rose 3.3 percent. South Korea's Kospi surged 5 percent, led by an 8 percent rise in Samsung Electronics and an 11 percent jump in SK Hynix.
Hong Kong fell 1.1 percent and Shanghai slipped 0.3 percent, while Australia's benchmark index declined 0.35 percent.
Indian equities staged a sharp rebound on Wednesday as easing crude prices and reassurance from the RBI Governor boosted investor confidence. The market recovered nearly all of the previous session's losses before profit-booking trimmed gains towards the close.
Banking, financial and real estate stocks led the advance. IT stocks also found support after Infosys chairman Nandan Nilekani and several domestic brokerages countered negative assessments from foreign brokerage firms.
Foreign portfolio investors remained sellers, offloading equities worth ₹1,843.40 crore. Domestic institutional investors absorbed the selling with net purchases of ₹3,637.26 crore.
The Sensex gained 790.54 points, or 1.04 percent, to close at 76,991.22, while the Nifty 50 advanced 197.55 points, or 0.83 percent, to 24,021.65. Bank Nifty climbed 1.69 percent to 58,150.35.
Federal Bank touched a record high of ₹327 before closing at ₹325.45. CSB Bank fell 3.93 percent and Dhanlaxmi Bank declined 1.01 percent, while South Indian Bank edged up 0.15 percent.
A stronger dollar and fears of higher US interest rates pushed gold below the key $4,000-an-ounce level. After reaching $5,600 an ounce in January, gold has corrected by around 30 percent.
Gold closed at $4,000.40 an ounce, down 2.72 percent or $111.60. It later slipped to $3,959 before recovering towards $3,980.
In Kerala, 22-carat gold fell ₹1,240 per sovereign to ₹1,04,800.
Silver dropped 7 percent to $57.61 an ounce, while platinum traded at $1,567, palladium at $1,154 and rhodium at $7,400.
Crude oil prices continued to decline as shipping disruptions in the Strait of Hormuz eased and transport flows normalised. Brent crude, which had touched $81.27 at the weekend, fell 4.5 percent to close at $73.74 and slipped further to $72.56 this morning. WTI crude declined to $69.33.
The Indian rupee ended seven paise stronger at ₹94.67 against the dollar on Wednesday. Confidence in India's foreign exchange reserves, highlighted by the RBI Governor, supported the currency.
In the offshore non-deliverable forward market, the dollar traded near ₹94.30 this morning.
Sensex: 76,991.22 (+1.04%)
Nifty 50: 24,021.65 (+0.83%)
Bank Nifty: 58,150.35 (+1.69%)
Nifty Midcap 100: 62,135.25 (+0.10%)
Nifty Smallcap 100: 18,879.30 (+0.39%)
Dow Jones: 51,848.90 (+0.35%)
S&P 500: 7,358.22 (-0.10%)
Nasdaq Composite: 25,476.64 (-0.43%)
Dollar/Rupee: ₹94.67 (-₹0.07)
Gold (ounce): $4,000.40 (-$111.60)
Gold (sovereign): ₹1,04,800 (-₹1,240)
Brent crude: $73.74 (-$3.34)