Indian equity markets are expected to open on a positive note on Tuesday, November 3, supported by a sharp decline in crude oil prices, a weaker US dollar and strong momentum from Monday's rally led by Reliance Industries. However, renewed selling in US technology stocks and uncertainty surrounding the American midterm elections could limit gains.
Brent crude has slipped below $105 a barrel, offering significant relief to India, one of the world's largest oil importers. Meanwhile, the US midterm elections on Tuesday are expected to influence global market sentiment, with investors closely watching whether President Donald Trump's Republican Party retains control of Congress.
Early indications from GIFT Nifty also point to a firm opening for Indian equities. The index closed at 23,569.50 on Monday night and briefly climbed to around 23,588 in early Tuesday trading before retreating.
The US midterm elections, scheduled for November 3, are emerging as a major source of uncertainty for global financial markets.
Opinion polls suggest that Republicans could face a difficult contest, potentially weakening Trump's legislative position if the party loses its congressional majority.
Although the election will not directly change Trump's presidency, a shift in congressional control could complicate the administration's legislative agenda and influence expectations surrounding taxation, government spending and trade policies.
Investors are also watching Washington's approach towards Iran. While diplomatic efforts have helped ease crude oil prices, uncertainty over the possibility of renewed military action continues to affect risk appetite.
The election results are expected to become clearer from November 4, though some close contests could take longer to resolve.
Reliance Industries emerged as the biggest driver of Monday's stock market rally, jumping 11.60% to ₹1,300 following stronger-than-expected second-quarter results.
The stock recorded its biggest single-day percentage gain since April 2020, adding approximately ₹1.83 lakh-crore to its market capitalisation, which reached around ₹17.58 lakh crore.
Reliance contributed roughly half of the Nifty 50's gains, demonstrating its substantial influence on India's benchmark indices.
The rally followed the company's record quarterly profit of ₹29,550 crore, up 33.8% year-on-year, supported by improved performance in its oil-to-chemicals and telecom businesses.
The sharp rise also boosted the estimated wealth of chairman Mukesh Ambani, reinforcing his position among India's wealthiest business leaders.
Brokerages have maintained a positive outlook for Reliance following its quarterly performance. DR Choksey FinServ's Deven Choksey has indicated a target price of ₹1,800, while JPMorgan's target stands at ₹1,675 and Jefferies' at ₹1,710.
The average analyst target price tracked by Trendlyne is around ₹1,666.
These targets suggest expectations of further appreciation, although their achievement will depend on earnings growth, market conditions and the performance of Reliance's major businesses.
Indian benchmark indices registered substantial gains on Monday, with the Sensex jumping 1,233.25 points, or 1.66%, to close at 75,692.78.
The Nifty 50 gained 387.70 points, or 1.68%, to finish at 23,440.80.
The rally was supported by Reliance's strong earnings, declining international crude oil prices, foreign institutional buying and expectations of possible tax relief for equity investors.
Reports that market regulators have recommended changes to long-term capital gains taxation also helped improve sentiment. However, no final tax decision has been announced.
Oil and gas stocks led the sectoral rally, with the relevant index gaining around 5.95%. Metals, automobiles, consumer durables, defence and capital market stocks also advanced.
Information technology, pharmaceuticals, media and private banking stocks remained relatively weak.
Market breadth was positive. On the BSE, 2,817 stocks advanced against 1,664 declines, while on the NSE, 2,443 stocks gained and around 1,155 declined, according to the market figures in the original report.
Foreign institutional investors purchased shares worth a net ₹3,114.68 crore in the cash market, while domestic institutions recorded net sales of ₹392.20 crore.
The Bank Nifty rose 0.58% to 55,002.20. The Nifty Midcap 100 advanced 1.19% to 57,983.40, while the Nifty Smallcap 100 added 0.71% to close at 18,595.30.
US stocks ended Monday's session on a mixed note as an early rally lost momentum amid renewed concerns about technology valuations and the scale of artificial intelligence investments.
The Dow Jones Industrial Average gained 213.67 points, or 0.41%, to close at 51,983.98.
However, the S&P 500 declined 38.67 points, or 0.51%, to 7,541.40, while the Nasdaq Composite dropped 272.68 points, or 1.07%, to 25,164.32.
Lower crude oil prices initially encouraged investors to buy stocks following recent declines. However, selling pressure returned to major technology companies, erasing much of the early gains.
Concerns about whether massive investments in AI infrastructure will generate adequate returns continue to weigh on the sector.
Apple reported stronger-than-expected quarterly revenue and earnings after Monday's market close, but its outlook raised fresh questions about profitability.
In its first quarterly earnings announcement under CEO John Ternus, Apple reported fiscal fourth-quarter revenue of $114.5 billion, an increase of 12% from a year earlier. Net profit rose to $30.71 billion, with earnings per share reaching $2.10.
Although iPhone revenue reached a record and Chinese sales improved, Apple's guidance for the December quarter pointed to a lower gross profit margin of 45% to 46%, compared with 47.9% in the reported quarter.
Higher memory costs and expenditure related to AI features were among the factors affecting the outlook. Apple shares declined 1.83% during regular trading and remained under pressure after the results.
Oracle Corporation plunged approximately 8.8% after announcing plans to raise $20 billion to fund its AI infrastructure investments.
Intel also declined around 8.8%, extending its recent losses.
The Nasdaq 100 has entered correction territory for the third time this year as investors reassess valuations across major technology companies.
A correction is generally defined as a decline of at least 10% from a recent market peak.
The index, which touched 31,224.47 on October 6, fell to 27,989.82 on Monday, representing a decline of approximately 10.4%. Earlier this year, the technology-heavy index experienced corrections of around 12% in March and 11% in July before recovering.
The latest decline highlights continuing concerns over AI-related capital expenditure, corporate borrowing and the sustainability of technology earnings growth.
Asian equity markets were mixed in early Tuesday trading as investors reacted to Wall Street's technology sell-off.
South Korea's Kospi fell around 3%, with semiconductor giants SK Hynix and Samsung Electronics declining approximately 3.5% each. Japan's Nikkei slipped 0.35%, while Taiwan's benchmark index declined around 1%.
China's Shanghai Composite was down 0.37%, while Hong Kong's Hang Seng gained 0.33%. Australian equities recorded marginal gains.
The weakness in semiconductor stocks indicates that concerns about AI valuations are extending beyond US markets.
European equities, meanwhile, had advanced on Monday, benefiting from falling energy prices. However, investors remained cautious ahead of the US election results.
Gold prices advanced on Monday as falling crude oil prices eased inflation concerns and investors continued to seek protection against geopolitical risks.
International spot gold climbed as high as $3,968.90 per ounce before closing at $3,947.70, a gain of $71.30, or 1.84%. In early Tuesday trading, gold briefly touched $3,971 before retreating towards $3,950.
In Kerala, the price of 22-carat gold increased by ₹360 per sovereign on Monday to ₹1,02,200.
Silver also recorded strong gains, advancing around 3% to $50.78 per ounce. It subsequently traded near $50.87.
Other precious metal prices were quoted at approximately $1,449 for platinum, $950 for palladium and $8,550 for rhodium, all per ounce.
Rubber prices in Kerala reached ₹300 per kg, marking a significant milestone for the domestic market even as international prices weakened. RSS-4 rubber rose to ₹30,000 per quintal in Kerala.
In Bangkok, RSS-1 rubber declined to $284.30 per quintal, while RSS-3 slipped to $280.90.
The divergence between domestic and international prices reflects differing supply and demand conditions. For Kerala's rubber growers, the higher price offers improved realisations. However, tyre manufacturers and other rubber-consuming industries could face increased input costs.
Industrial metal prices moved in different directions on Monday. Copper declined 0.48% to $14,380 per tonne, while aluminium gained 0.81% to $3,094. Nickel and tin recorded gains, whereas zinc and lead traded lower.
Among agricultural commodities, cocoa declined 1.12% to $5,392 per tonne. Arabica coffee rose 2.42% to $2.94 per pound, while palm oil fell 0.68% to 4,649 Malaysian ringgit per tonne.
The Indian rupee recorded a modest recovery on Monday, gaining five paise to close at ₹94.90 against the US dollar. In early offshore forward trading on Tuesday, the dollar initially approached ₹94.90 before retreating towards ₹94.71.
The US dollar index had closed Monday at 101.75 before edging up to around 101.80. The euro traded near $1.1187 and the pound sterling around $1.3404, while the Japanese yen stood at approximately 157.93 per dollar. The Chinese yuan was quoted near 6.65 against the dollar.
The yield on the benchmark US 10-year Treasury bond was approximately 4.915%.
The sharp decline in international crude oil prices is among the most encouraging developments for Indian markets.
Brent crude, which had approached $118 per barrel on Friday, dropped sharply on Monday as diplomatic efforts to ease the conflict involving Iran reduced concerns about supply disruptions.
Brent settled near $104.42 per barrel, declining approximately 8%, and recovered marginally to around $104.76 in early Tuesday trading. West Texas Intermediate crude was quoted near $97.05.
Discussions involving Washington and Tehran, including the possible reopening of the Strait of Hormuz, have helped ease fears of prolonged supply disruptions.
For India, lower crude prices could reduce the oil import bill, ease inflationary pressure and provide some support to the rupee.
However, any renewed military escalation in West Asia could reverse the decline.
Cryptocurrency markets continued to face selling pressure following the reported cyberattack on Binance and broader concerns about the security of digital assets.
Bitcoin slipped below $77,150, while Ethereum traded under $2,260. Solana fell below $92.50.
The weakness reflects continued risk aversion among investors, particularly towards speculative assets.
(Monday, November 2)
Sensex: 75,692.78 (+1.66%)
Nifty 50: 23,440.80 (+1.68%)
Bank Nifty: 55,002.20 (+0.58%)
Midcap 100: 57,983.40 (+1.19%)
Smallcap 100: 18,595.30 (+0.71%)
Dow Jones: 51,983.98 (+0.41%)
S&P 500: 7,541.40 (-0.51%)
Nasdaq Composite: 25,164.32 (-1.07%)
USD/INR: ₹94.90 (-₹0.05)
Gold (international): $3,947.70/oz (+$71.30)
Gold (Kerala, sovereign): ₹1,02,200 (+₹360)
Brent crude: $104.42/barrel (-$9.01)