Global markets offered mixed signals on Tuesday, with Asian equities surrendering much of their early gains despite a strong technology-led rally on Wall Street. Geopolitical tensions remain elevated, crude oil continues to trade around the $100-a-barrel mark and foreign investors are maintaining their selling pressure in Indian equities.
Domestic sentiment has also been hit by Finance Minister Nirmala Sitharaman's indication that India-US trade negotiations have reached a difficult stage. Investors are now turning their attention to the Reserve Bank of India’s monetary policy decision on October 7, particularly for signals on whether an expected rate increase could be followed by further tightening.
Corporate business updates ahead of the September-quarter earnings season have meanwhile done little to significantly improve expectations.
GIFT Nifty futures closed at 22,647.50 on Monday night. The index rose as high as 22,668 in early Tuesday trade before paring gains, indicating a mildly positive opening for the Indian market.
The Reserve Bank of India’s Monetary Policy Committee began its meeting on Monday. Governor Sanjay Malhotra is scheduled to announce the policy decision at 10 am on October 7.
The broader market expectation is for the repo rate to be raised by 25 basis points, from 5.25% to 5.50%. If delivered, it would be the first rate increase since Malhotra took charge as RBI Governor.
The repo rate is the interest rate at which the RBI provides short-term funds to commercial banks and is one of the key instruments used to influence borrowing costs across the economy.
Retail inflation stood at 4.82% in the latest reading, strengthening expectations that the central bank may opt for tighter monetary conditions.
However, some economists believe the RBI may avoid signalling a prolonged rate-hike cycle because of the possible impact on investment and industrial growth.
Global interest rates, crude oil prices and domestic food inflation are likely to influence the future policy path. Any impact of El Niño on agricultural output could also become an important factor.
US markets advanced on Monday as investors returned to artificial intelligence and technology stocks, helping the Nasdaq close at a record high.
SpaceX-linked optimism and a 2.2% rise in Tesla added to enthusiasm around Elon Musk-related assets. Nvidia climbed to a record $240.10, pushing the chipmaker’s market capitalisation closer to the $6 trillion mark.
Shares of product-design software company PTC jumped around 36% following reports that French industrial group Schneider Electric was moving to acquire the company.
Investors temporarily looked beyond growing concerns over the huge capital requirements of AI infrastructure, including data centres, and the rising debt being taken on by technology companies.
At the same time, government bond prices have weakened in the US and several other economies, pushing yields higher as both governments and companies increase borrowing.
The Dow Jones Industrial Average gained 90.94 points, or 0.18%, to close at 51,267.90.
The S&P 500 rose 51.23 points, or 0.66%, to 7,773.95, while the Nasdaq Composite climbed 286.45 points, or 1.05%, to 27,477.31.
US stock futures remained mildly positive on Tuesday morning. Dow futures were up around 70 points, or 0.14%. S&P 500 futures gained about 7 points, or 0.09%, while Nasdaq futures were higher by 37 points, or 0.12%.
Indian stocks traded in the US showed a mixed trend.
HDFC Bank ADRs fell 1.03% during regular trading before recovering 1.09% in extended trade to close at $22.35.
ICICI Bank gained 1.13% during the regular session and added another 0.67% in after-hours trade to end at $27.94.
Technology stocks were weaker. Infosys fell 2.54% in regular trade and slipped another 0.09% later to close at $10.75.
Wipro lost 1.74% during the session and declined another 1.78% in extended trading to $1.68.
Most European equity markets ended Monday with modest gains.
France was an exception, with its benchmark index falling around 0.8% amid renewed concerns over the country’s budget position and weakness in government bonds.
Market participants expect France’s fiscal challenges to remain an important issue for investors.
Asian equities were mixed on Tuesday morning.
Japan’s Nikkei initially gained around 0.5% before giving up about half of the advance. South Korea’s Kospi slipped 0.4%, while Australia’s benchmark index gained about 0.5%.
Taiwan’s market, after starting higher, moved 0.15% into negative territory. Hong Kong’s Hang Seng outperformed, rising around 1%.
Indian equities rebounded on Monday after four consecutive sessions of losses, with the Nifty moving back above 22,500.
However, gains were reduced after Finance Minister Nirmala Sitharaman said India-US trade negotiations had reached a difficult phase. The major indices had been trading nearly 1% higher before her comments.
Any prolonged failure to reach an agreement could raise concerns that tensions in trade relations may spill over into other areas of the India-US relationship. The US Trade Representative had also indicated earlier that a quick agreement was unlikely.
Pharma and healthcare stocks were among the weakest performers on Monday, while FMCG, consumer durables and capital-market stocks recorded strong gains.
HDFC Bank shares fell 2.2% to ₹704.80 despite the announcement of its new leadership.
Kotak Mahindra Bank, which also saw a leadership transition, slipped 0.56%. A Macquarie analysis highlighting relatively slow loan growth compared with deposit growth and a weaker CASA ratio weighed on HDFC Bank sentiment.
However, several brokerages continue to see meaningful upside potential in the stock.
Target prices range widely:
Jefferies: ₹880
Motilal Oswal: ₹925
Citi: ₹970
JPMorgan: ₹990
Morgan Stanley: ₹1,025
Emkay: ₹1,225
BNP Paribas: ₹1,400
Federal Bank gained 2.88% to close at ₹327.35.
Although most IT stocks advanced, HCL Technologies declined 3.31% and Infosys fell 1.4%.
Despite the rise in benchmark indices, market breadth remained negative. On the BSE, 2,052 stocks advanced while 2,448 declined. On the NSE, 1,736 stocks gained and 1,832 closed lower.
Foreign portfolio investors continued to sell aggressively, recording net cash-market sales of ₹4,699.14 crore. Domestic institutional investors partly offset the selling with net purchases of ₹5,181.62 crore.
The Sensex gained 472.77 points, or 0.66%, to close at 72,382.47. The Nifty 50 rose 133.80 points, or 0.60%, to 22,555.75. Bank Nifty climbed 263.35 points, or 0.48%, to 54,714.10.
The Nifty Midcap 100 gained 391.65 points, or 0.67%, to 59,123.65, while the Smallcap 100 added 90.45 points, or 0.47%, to 19,149.10.
Gold moved within a narrow range on Monday as investors struggled to identify a clear direction.
International gold slipped just $0.30 to close at $4,141.50 an ounce. It rose around 0.2% on Tuesday morning to about $4,148.
Large-scale gold sales from Russia have been cited as one factor limiting further upside.
In Keralam, 22-carat gold remained unchanged at ₹1,09,400 per sovereign. Silver slipped to $61.09 an ounce. Platinum was around $1,709, palladium at $1,156 and rhodium at $8,400.
International rubber prices moved higher again, while prices in Keralam remained unchanged.
In Bangkok, RSS-1 was quoted at $289 per quintal and RSS-3 at $285.60 per quintal.RSS-4 in Keralam remained at ₹28,000 per quintal.
Industrial metals moved in different directions. Copper gained 0.52% to $14,428.85 a tonne. Aluminium slipped 0.13% to $3,118 a tonne. Lead and nickel advanced, while zinc and tin declined.
Cocoa prices jumped 3.47% to close at $5,867 a tonne.
Supplies during the 2025-26 season were stronger than expected, but expectations of lower production in the coming season supported prices.
Côte d’Ivoire’s cocoa output is projected to decline from 2.2 million tonnes to around 1.8 million tonnes in 2026-27, while Ghana’s production is estimated to fall by about 17%.
Arabica coffee rose 1.32% to $2.926 a pound. Palm oil climbed 0.95% to 4,578 Malaysian ringgit a tonne.
The US Dollar Index rose to close at 102.17 before easing to around 102.09 on Tuesday morning. The euro weakened to $1.1227 and the British pound to $1.3227.
The Japanese yen weakened to around 157.81 against the dollar, while the Chinese yuan remained near 6.70 per dollar.
US bond yields continued to rise, with the 10-year Treasury yield reaching 5.313% and the 30-year yield at 5.67%.
The rupee recorded a marginal gain on Monday, helped by intervention from the Reserve Bank of India. The dollar weakened by three paise to ₹96.29. In the offshore forward market on Tuesday morning, the dollar was quoted around ₹96.33.
The Chinese yuan weakened to ₹14.36, while the euro slipped to around ₹108.14.
Crude oil prices eased but remained around the psychologically important $100 level.
Brent crude fell $1.93 to settle at $100.32 a barrel on Monday before recovering to around $100.56 on Tuesday morning. WTI crude was trading around $89.55 a barrel.
Persistent geopolitical uncertainty continues to keep energy markets volatile.
Cryptocurrencies rebounded after falling earlier. Bitcoin moved back above $85,750 on Tuesday morning. Ether remained below $2,710, while Solana traded below $120.
(October 5, Monday)
Sensex: 72,382.47 | +0.66%
Nifty 50: 22,555.75 | +0.60%
Bank Nifty: 54,714.10 | +0.48%
Midcap 100: 59,123.65 | +0.67%
Smallcap 100: 19,149.10 | +0.47%
Dow Jones: 51,267.90 | +0.18%
S&P 500: 7,773.95 | +0.66%
Nasdaq: 27,477.31 | +1.05%
US dollar: ₹96.29 | -₹0.03
Gold: $4,141.50/oz | -$0.30
Gold in Kerala: ₹1,09,400/sovereign | Unchanged
Brent crude: $100.32/barrel | -$1.93