After a correction triggered by profit booking on May 13, Indian markets are expected to open on a positive note on May 14, although global cues remain mixed. Investor sentiment improved after recession fears seemed to ease globally, pushing crude oil prices above $66 per barrel.
Rating agencies are now revising growth outlooks upwards for several countries, suggesting a brighter near-term economic climate.
Retail inflation in India cooled to a six-year low of 3.16% in April, down from 3.34% in March. The fall was largely due to a sharp dip in food inflation, which dropped from 2.69% to 1.78%. However, core inflation — excluding food and fuel — rose to 4.1%, the highest in 18 months. While this eases pressure on the Reserve Bank of India, it keeps the June interest rate cut hopes modest.
In the US, April inflation fell to 2.3%, slightly better than expectations of 2.4%. Core inflation stood at 2.8%, supporting speculation that a rate cut may not arrive before September.
The GIFT Nifty closed at 24,747.50 on the night of May 13 and opened slightly higher on May 14 at 24,753, though it briefly dipped to 24,714 before inching up again. This signals a potential upward start for Indian indices.
European markets closed slightly in the green. In the US, the Dow Jones declined, weighed down by an 18% crash in UnitedHealth’s stock after the CEO resigned and earnings guidance was pulled back. However, the S&P 500 and Nasdaq gained ground — the latter rising 1.61% — buoyed by Nvidia’s 6% rally after Saudi Arabia announced plans to purchase 18,000 AI chips. Other AI-related stocks also saw a boost, while Microsoft confirmed it would lay off 3% of its workforce this year.
On May 13, the Dow closed 269.67 points lower at 42,140.43. The S&P 500 rose 42.36 points to 5,886.55, and the Nasdaq climbed 301.74 points to 19,010.08. US futures this morning are slightly down: Dow (-0.06%), S&P (-0.08%), and Nasdaq (-0.12%).
Asian markets, which posted gains the previous day, opened weak on May 14. Japan’s Nikkei fell by 0.75% in early trade. Hong Kong and Shanghai indices opened stronger but showed signs of cautious movement.
Tuesday saw a clear correction in Indian markets after Monday’s rally. The Nifty fell 346.35 points (1.39%) to close at 24,578.35, and the Sensex shed 1,281.68 points (1.55%) to settle at 81,148.22. Bank Nifty ended 0.80% lower at 54,940.85. Interestingly, midcap and smallcap indices bucked the trend. The Nifty Midcap 100 rose 104.65 points (0.19%) to 55,520.70, and the Smallcap 100 gained 136.10 points (0.81%) to close at 16,903.40.
The market breadth remained positive. On the BSE, 2,514 stocks advanced compared to 1,455 declines, while on the NSE, 1,948 stocks rose and 937 fell. A total of 43 stocks hit 52-week highs and only 10 touched new lows. On the circuit front, 199 stocks hit upper circuits, while 31 hit the lower band.
Foreign Institutional Investors (FIIs) sold shares worth ₹476.86 crore in the cash segment, while Domestic Institutional Investors (DIIs) purchased ₹4,273.80 crore worth of equities.
Nifty now finds support at 24,530 and 24,430. On the upside, resistance is expected near 24,860 and 24,960. If momentum recovers, a move towards 24,800 could be on the cards.
Gold, which saw a dip in investor preference amid trade tensions easing, found strength again due to lingering geopolitical worries and a weaker dollar. It rose by $13.10 on May 13 to close at $3,251.20 per ounce. On the morning of May 14, prices climbed to $3,257 before settling back to $3,244.
In Kerala, gold prices surged by ₹840 per sovereign in two phases, closing at ₹70,840. Silver prices reached $33.32 per ounce. Copper rose 0.50% to $9,533 per tonne, aluminium climbed 0.62% to $2,487.72, while most other base metals declined, except tin.
In the commodities space, rubber prices rose 2.74% to 176 cents per kg internationally. Cocoa jumped 6.34% to $9,902.24, coffee ticked up 0.06%, and palm oil gained 2.04%.
The dollar index slipped from 101.76 to 101.00 by May 13’s close and hovered around 100.96 on the morning of May 14. The euro climbed to $1.1189, the pound hit $1.3305, and the Japanese yen appreciated to 147.46 against the dollar.
After a one-day holiday, India’s forex market reopened with the rupee rising 74 paise in early trade. However, speculative long positions were unwound quickly, resulting in the rupee closing at ₹85.33 against the dollar — a four-paise gain. China’s yuan, meanwhile, dropped to 7.21 per dollar.
Crude prices jumped nearly 2% on May 13, driven by fading recession fears and progress in trade negotiations. Brent crude closed at $66.63 per barrel. By the morning of May 14, Brent was trading at $66.38, WTI at $63.43, and Murban crude at $66.66.
After an explosive rally in recent days, cryptocurrencies experienced volatile movement. Bitcoin, which had dropped below $101,000, bounced back above $104,000. Ether surged 10% to reach $2,700, indicating continued interest in the space despite profit-booking.