Markets are once again gripped by anxiety, with growing doubts about whether recent gains can be sustained. US markets declined on Tuesday and futures slipped further on Wednesday. A lack of progress in Iran–US talks pushed crude oil prices above $66 a barrel.
India’s weather office forecasts that the southwest monsoon will hit the mainland within four days, earlier than usual—likely benefiting kharif crops.
In April, growth in core industrial sectors fell to a low of 0.5 percent, the weakest in eight months. The core sector contributes 41 percent to the Index of Industrial Production.
In the derivatives market, Gift Nifty closed at 24,805 on Tuesday night and dropped to 24,791 in early Wednesday trade before seeing a slight uptick, indicating a likely flat to positive opening for domestic markets.
European markets closed higher on Tuesday. Shares of Novo Nordisk rose 3.3 percent after the company sacked its CEO amid intensifying competition to its obesity drug Wegovy. Vodafone PLC surged 7 percent after reporting losses and a tough outlook—results that analysts said were largely expected.
US markets snapped a six-day winning streak on Tuesday, closing in the red. Despite brushing off a credit downgrade earlier, investors reacted to a fresh warning from JPMorgan Chase CEO Jamie Dimon. He cautioned that markets are heading toward a significant correction due to slowing growth and persistent inflation, which investors are currently ignoring. After recovering from a 20 percent drop triggered by trade war fears, the S&P 500 now stands just 3 percent below its all-time high.
The Dow Jones fell 114.83 points (0.27 percent) to close at 42,677.24. The S&P 500 shed 23.14 points (0.39 percent) to end at 5940.46, while the Nasdaq lost 72.75 points (0.38 percent) to close at 19,142.71.
US futures continued to decline Wednesday morning, with Dow, S&P 500, and Nasdaq futures all down by about 0.22–0.23 percent.
Asian markets traded in mixed directions. Japan’s Nikkei fell 0.25 percent after exports declined for the second consecutive month. However, indices in Australia, South Korea, Hong Kong, and Shanghai opened higher.
Indian markets extended losses on Tuesday, dragged down by heavy foreign selling and declines in blue-chip stocks like HDFC Bank and Reliance Industries. Defensive stocks, which had performed well recently, also took a hit.
The Nifty dropped 261.55 points (1.05 percent) to close at 24,683.90. The Sensex lost 872.98 points (1.06 percent), ending at 81,186.44. Bank Nifty declined by 543.35 points (0.98 percent) to close at 54,877.35. The Nifty Midcap 100 index dropped 922.80 points (1.62 percent) to 56,182.65, while the Smallcap 100 fell 166.65 points (0.94 percent) to 17,483.00.
Market breadth favoured declines. On the BSE, 1,341 stocks advanced while 2,642 declined. On the NSE, 915 stocks gained while 1,974 fell.
A total of 49 stocks hit 52-week highs on the NSE, while 18 touched 52-week lows. Upper circuit limits were hit by 117 stocks; 55 hit lower circuits.
Foreign institutional investors were net sellers in the cash market on Tuesday, offloading shares worth ₹10,016.10 crore. Domestic funds bought equities worth ₹6,738.39 crore.
After breaching support at 24,800, the Nifty’s next support levels are at 24,500 and then in the 24,380–24,240 range. Resistance is likely near 24,920 and 25,000.
Markets responded belatedly on Tuesday to the US credit rating downgrade. The dollar index dropped, boosting gold prices. Gold jumped $61.70 to close at $3,292.20 an ounce. In early Wednesday trade, it briefly touched $3,306 before retreating to $3,296.
In Kerala, gold prices fell by ₹360 per sovereign to ₹69,680.
In global commodity trade, rubber fell 0.17 percent to 172.50 cents/kg, cocoa rose 0.05 percent to $10,910.61, coffee dropped 1.61 percent, and palm oil gained 0.67 percent.
The dollar index closed at 100.12 on Tuesday and slipped to 99.94 on Wednesday morning.
The euro rose to $1.1293 and the pound to $1.3403. The yen strengthened to 144.26 per US dollar. US Treasury yields edged up, with the 10-year yield at 4.495 percent. The Chinese yuan fell to 7.22 per US dollar.
The rupee opened weaker on Wednesday and closed further down at 85.64 per US dollar, a drop of 24 paise.
Crude oil prices rose on Wednesday after a modest decline the previous day. Brent ended Tuesday at $65.38 a barrel and rose to $66.39 in early trade. WTI stood at $62.85 and Murban crude at $65.83.
Cryptocurrencies climbed again. Bitcoin briefly crossed $107,000 before slipping slightly, while Ether hovered near $2,530.