Global markets are closely watching the US Federal Reserve's interest rate decision due later tonight, while investors are also tracking progress in West Asian peace efforts. Closer home, a sharp shortfall in southwest monsoon rainfall is emerging as a significant concern for the Indian economy and financial markets.
While the Fed is widely expected to keep rates unchanged, investors are hoping for signals from new Fed chair Kevin Warsh that rate cuts could follow later this year.
Gift Nifty, which closed at 24,042 on Tuesday night, climbed to 24,081 in early trade before slipping to 23,965, indicating a weak start for Indian equities.
The India Meteorological Department has reported that southwest monsoon rainfall is running 35 percent below normal after the first 16 days of the season.
Rainfall is deficient in all regions except north-west India.
The emergence of El Niño conditions is expected to further weaken monsoon activity.
Current indications suggest the rainfall deficit could be much worse than earlier estimates.
A poor monsoon could hurt agricultural output and rural demand.
Falling crude oil prices following the US-Iran agreement boosted industrial stocks, while technology shares came under pressure.
Dow Jones rose to a record high above 52,000.
S&P 500 and Nasdaq declined sharply.
Major technology stocks including AMD, Micron, Nvidia and Broadcom lost ground.
Meanwhile, shares of SpaceX rose 5 percent to close at $201.80, lifting its market value to $2.77 trillion and briefly challenging Microsoft for the fourth position among the world's most valuable companies.
Dow Jones: 51,999.67 (+0.64%)
S&P 500: 7,511.35 (-0.57%)
Nasdaq: 26,376.34 (-1.15%)
Early Wednesday trading showed modest gains:
Dow futures: +0.18%
S&P 500 futures: +0.23%
Nasdaq futures: +0.37%
Indian ADRs traded with mixed momentum in New York.
HDFC Bank gained 0.08 percent in after-hours trade.
ICICI Bank slipped 0.43 percent.
Infosys declined 1.09 percent.
Wipro fell 0.42 percent after a strong regular session.
European markets ended higher on expectations that the US could ease restrictions on Iranian oil exports as part of a broader diplomatic understanding.
Asian equities were moving in different directions on Wednesday morning.
Japan's Nikkei: +0.45%
Australia: +0.10%
Hong Kong: +0.25%
South Korea's Kospi: -0.35%
Shanghai Composite: -0.45%
Indian equities continued their upward momentum on Tuesday, supported by easing geopolitical tensions.
However, concerns over:
Weak monsoon rainfall
Elevated crude oil prices despite recent declines
prevented a stronger rally.
Losers
Metal stocks fell sharply after aluminium prices weakened.
Vedanta lost 5 percent.
NALCO declined 4 percent.
Hindalco dropped 3 percent.
Auto, pharmaceutical and healthcare shares also ended lower.
Gainers
Realty
Information technology
Consumer durables
Media
Oil and gas
FMCG
The reopening of the Strait of Hormuz improved supply prospects for ammonia and sulphur, boosting fertiliser stocks.
FACT emerged as the biggest gainer, ending 9.2 percent higher after rising more than 15 percent during the session.
After turning buyers on Monday, foreign portfolio investors returned to selling.
Net FPI selling: ₹749.18 crore
Domestic institutions were marginal buyers with net purchases of ₹0.06 crore
Sensex: 76,808.48 (+0.71%)
Nifty 50: 23,989.15 (+0.57%)
Bank Nifty: 57,297.15 (+0.17%)
Nifty Midcap 100: 61,802.05 (+0.41%)
Nifty Smallcap 100: 18,477.75 (+0.42%)
Market breadth remained positive.
BSE gainers: 2,293
BSE losers: 1,967
NSE gainers: 1,944
NSE losers: 1,348
Federal Bank hit a record ₹321.10 before closing at ₹320.25, up 0.99 percent.
South Indian Bank gained 0.70 percent to ₹47.25.
CSB Bank declined 0.93 percent to ₹369.35.
Dhanlaxmi Bank rose 1.77 percent to ₹32.69.
After seven consecutive sessions of decline amid allegations of accounting irregularities, shares of Rajesh Exports hit the upper circuit for a second straight day.
The company has denied allegations made in SEBI's interim order, although reports suggest investigations by the Ministry of Corporate Affairs and the Serious Fraud Investigation Office may follow.
Wipro will establish an Applied AI Centre of Excellence focused on Anthropic's Claude platform in Bengaluru and plans to provide AI certification to 10,000 employees.
Promoter group Fila plans to sell a 7 percent stake in DOMS Industries through a block deal at a floor price of ₹2,100, around 9 percent below the prevailing market price.
Yum! Brands has agreed to sell its Pizza Hut restaurant chain to Long Range Capital for $2.7 billion. In India, Pizza Hut is operated by Devyani International.
Gold continued to rise, although at a slower pace.
Gold closed at $4,332.60 an ounce, up $22.10.
Early Wednesday price: around $4,335.
Kerala 22-carat gold fell ₹120 per sovereign to ₹1,11,000.
Silver: $70.16 an ounce.
Platinum: $1,804.
Palladium: $1,339.
Rhodium: $7,625.
Most industrial metals declined on Tuesday.
Copper fell 0.23 percent to $13,681.90 a tonne.
Aluminium rose 0.14 percent to $3,375.04.
Zinc, nickel and lead weakened.
Natural rubber prices extended their rally.
RSS-1 in Bangkok: $325 per quintal.
RSS-3: $328.55 per quintal.
Kerala RSS-4 reached a record ₹27,500 per quintal.
Cocoa prices jumped 6.55 percent to $4,232 a tonne.
Consultancy StoneX expects El Niño conditions to significantly reduce West African production in the 2026-27 season and has lowered its global surplus estimates.
The US Dollar Index closed at 99.54 and eased further to around 99.50 in early trade.
Euro: $1.1613
Pound sterling: $1.3429
Japanese yen: 160.33 per dollar
Chinese yuan: 6.76 per dollar
US 10-year Treasury yields eased to 4.434 percent ahead of the Fed decision.
The Indian rupee gained 15 paise on Tuesday to close at ₹94.56 against the dollar.
Market participants believe the currency could strengthen below ₹92 this month if favourable conditions continue.
Oil prices continued to retreat on hopes of lasting peace in West Asia.
Brent crude closed at $78.96 a barrel after falling 5 percent.
Early Wednesday price: $79.37.
WTI crude traded around $76.45.
Digital assets failed to benefit from improving geopolitical sentiment.
Bitcoin fell below $65,600.
Ether slipped below $1,785.
Solana traded below $73.5.
Sensex: 76,808.48 (+0.71%)
Nifty 50: 23,989.15 (+0.57%)
Bank Nifty: 57,297.15 (+0.17%)
Nifty Midcap 100: 61,802.05 (+0.41%)
Nifty Smallcap 100: 18,477.75 (+0.42%)
Dow Jones: 51,999.67 (+0.64%)
S&P 500: 7,511.35 (-0.57%)
Nasdaq: 26,376.34 (-1.15%)
Dollar/₹: ₹94.56 (-₹0.15)
Gold (ounce): $4,332.60 (+$22.10)
Gold (sovereign): ₹1,11,000 (-₹120)
Brent crude: $78.96 (-$4.21)