The US Federal Reserve has kept interest rates unchanged, in line with expectations. Markets are now pricing in a possible rate hike in December.
Disappointing quarterly results from Alphabet, Google's parent company, have triggered a sharp fall in its shares, dragging Nasdaq futures lower. The sell-off in technology stocks could weigh on Indian equities when trading begins on Thursday. Alphabet's results have also reinforced concerns over the massive investments being made in artificial intelligence.
Most Asian markets are trading lower, although a few indices have managed to post gains.
Gift Nifty, which closed at 22,766.00 in Wednesday night's derivatives trading at Gift City, slipped to 22,727 on Thursday morning, indicating a weak opening for the Indian market.
The US Federal Reserve's Federal Open Market Committee left interest rates unchanged, as widely expected. The decision produced little immediate reaction in financial markets, with US equities closing higher.
Fed chairman Kevin Warsh indicated that more economic data would be needed to assess the direction of inflation.
Warsh also announced that, beginning next year, two of the Fed's eight annual meetings would be devoted to strategic discussions rather than interest rate decisions. Currently, only one meeting is dedicated exclusively to such discussions.
The European Central Bank is scheduled to announce its rate decision on Friday, followed by the Bank of Japan on Saturday. Neither central bank is expected to raise rates this month.
Markets broadly expect the Fed to increase interest rates in December. The current federal funds rate stands at 3.75–4.00 per cent.
Alphabet's third-quarter results have unsettled investors after revenue and profits fell short of expectations.
Revenue came in at $127.58 billion against expectations of $128.22 billion. Operating profit stood at $40.58 billion, below the anticipated $43.19 billion. Net income declined to $26.17 billion from $34.98 billion.
The decline in free cash flow was substantially greater than expected. Alphabet's long-term debt has also increased nearly fivefold over the past year, from $21.6 billion to $125.1 billion.
The company plans capital expenditure of $200 billion this year and $300 billion next year, primarily to support its expanding AI infrastructure. These massive commitments have intensified investor concerns about the returns on AI investments and their impact on cash flow and corporate balance sheets.
Microsoft, meanwhile, reported better-than-expected revenue and profit growth. Its shares gained around three per cent in after-hours trading, supported by strong performance in its cloud business. Revenue increased 19 per cent to $92.28 billion, although free cash flow declined 27 per cent.
Microsoft plans capital expenditure of $170 billion this year. Around 75 per cent of the spending is earmarked for Intel chips and Nvidia GPUs.
The scale of these investments, despite strong operating performance, continues to raise questions about the financial sustainability of the AI spending boom.
US equity markets advanced for the third consecutive session on Wednesday. Oracle Corporation surged 10.73 per cent after announcing limits on borrowing through 2030 and raising its revenue outlook for that year. The company expects annual revenue growth of 35 per cent through 2030.
However, Oracle shares declined 2.4 per cent in after-hours trading.
South Korean chipmaker SK Hynix reported record profit growth, sending its American depository receipts up 13 per cent. The performance also lifted sentiment towards other semiconductor companies.
The Dow Jones Industrial Average gained 97.53 points, or 0.19 per cent, to close at 52,475.10.
The S&P 500 rose 21.38 points, or 0.28 per cent, to 7,743.98, while the Nasdaq Composite advanced 72.04 points, or 0.27 per cent, to 26,549.85.
US stock futures showed divergent trends on Thursday morning. Dow Jones futures gained 116 points, or 0.22 per cent.
S&P 500 futures declined 28 points, or 0.36 per cent, while Nasdaq futures fell 343 points, or 1.14 per cent, reflecting pressure on technology stocks following Alphabet's earnings announcement.
Indian companies listed through American depositary receipts recorded mixed movements in New York on Wednesday.
HDFC Bank's ADR gained 0.89 per cent during regular trading and added another 0.09 per cent in extended trading to close at $21.57.
ICICI Bank declined 0.76 per cent during the regular session and lost a further 2.44 per cent in extended trading, ending at $28.00.
Infosys fell 0.17 per cent during regular trading before recovering 0.08 per cent in extended trading to close at $12.10.
Wipro advanced 0.98 per cent during the regular session and gained another 1.46 per cent in extended trading, finishing at $2.09.
European equity markets ended Wednesday's session with modest gains. Automaker Stellantis surged 15.38 per cent after returning to profitability.
In contrast, Thyssenkrupp shares plunged 17 per cent following the separation and listing of its materials trading business, TK Axelera.
Asian stock markets showed mixed trends on Thursday morning. South Korea's Kospi fell 1.8 per cent. Semiconductor major SK Hynix gained two per cent, while Samsung Electronics declined four per cent despite reporting record third-quarter profits broadly in line with expectations.
Japan's Nikkei advanced 0.90 per cent. Taiwan's benchmark index declined 1.2 per cent, while China's Shanghai index fell 0.75 per cent. Hong Kong's Hang Seng traded with marginal gains.
Indian equities closed on a mixed note on Wednesday, with benchmark indices declining even as mid-cap and small-cap stocks continued their upward movement. Rising crude oil prices remained a major concern for investors.
The benchmark indices opened lower and briefly recovered into positive territory, but selling pressure in information technology stocks dragged them back into losses. The Nifty IT index fell 1.98 per cent. Oil, real estate, FMCG and metal stocks also declined.
Banking, financial services, automobiles, pharmaceuticals, healthcare, consumer durables and media stocks gained.
Reliance's Jio Platforms made an impressive stock market debut on Wednesday.
The stock listed at a 24 per cent premium to its issue price and ended the session with a gain of 26.81 per cent.
Jio's market capitalisation reached ₹13.05 lakh crore, making it India's second-most valuable listed company after Reliance Industries.
The listing also pushed the combined market capitalisation of Reliance Group's listed companies beyond ₹30 lakh crore, overtaking the Tata Group's estimated ₹25 lakh crore.
However, this comparison involves adding the market values of listed group companies, including subsidiaries. Adjusting for the value of subsidiaries already reflected in their parent company's market capitalisation would place Reliance Group below Tata Group.
The broader market showed resilience despite weakness in the headline indices. On the BSE, 2,209 stocks advanced against 2,133 declines. On the NSE, 1,924 stocks gained while 1,616 declined.
Foreign institutional investors remained net buyers on Wednesday, purchasing shares worth ₹871.83 crore in the cash market. Domestic institutional investors also recorded net purchases of ₹643.35 crore.
The Sensex declined 352.64 points, or 0.48 per cent, to close at 73,246.03. The Nifty 50 fell 50.90 points, or 0.22 per cent, to 22,698.85. Bank Nifty gained 292.50 points, or 0.54 per cent, to close at 54,267.40.
The Nifty Midcap 100 advanced 244.80 points, or 0.43 per cent, to 57,274.70. The Nifty Smallcap 100 rose 166.20 points, or 0.90 per cent, to 18,684.90.
Gold prices continued to fluctuate after the Federal Reserve kept interest rates unchanged. The policy announcement had little immediate impact on the market, although expectations of a December rate hike gained strength.
Spot gold rose $7.30, or 0.18 per cent, on Wednesday to close at $4,068.60 per ounce. On Thursday morning, the metal climbed to $4,083 before falling to $4,054 and subsequently recovering to around $4,064.
In Kerala, the price of 22-carat gold increased ₹480 on Wednesday to ₹1,05,560 per sovereign of eight grams.
Silver closed at $54.10 per ounce. Platinum was quoted at $1,535 per ounce, palladium at $1,007 and rhodium at $8,550.
Rubber prices extended their gains in international and domestic markets. In Bangkok, RSS-1 rubber increased to $287.10 per quintal, while RSS-3 rose to $283.70.
In Kerala, RSS-4 rubber reached ₹29,600 per quintal.
Most industrial metals advanced on Wednesday, with aluminium being the notable exception. Copper gained 0.13 per cent to $14,644.15 per tonne.
Aluminium declined 0.04 per cent to $3,084 per tonne. Nickel, tin, lead and zinc also recorded gains.
Cocoa prices fell 2.17 per cent to close at $5,456 per tonne. Arabica coffee declined 2.38 per cent to $2.87 per pound. Palm oil prices dropped 0.72 per cent to 4,667 Malaysian ringgit per tonne.
The US dollar index declined on Wednesday, closing at 102.19. It slipped further to 102.17 on Thursday morning.
The euro was trading at $1.1148, while the British pound stood at $1.3325. The Japanese yen traded at 157.87 against the dollar. The Chinese yuan remained at 6.67 per dollar.
The yield on the benchmark US 10-year Treasury bond eased to 5.003 per cent on Thursday morning.
The Indian rupee declined against the US dollar on Wednesday. The dollar gained 10 paise to close at ₹95.22. In offshore forward trading on Thursday morning, the dollar was quoted at ₹95.20.
The Chinese yuan strengthened to ₹14.29, while the euro rose to ₹106.23.
Crude oil prices declined on Thursday morning after recording gains in the previous session. Oil prices had risen 1.26 per cent on Wednesday.
Brent crude gained $1.44 to close at $115.88 per barrel. On Thursday morning, Brent fell to $114.76 per barrel. US West Texas Intermediate crude was trading at $102.11 per barrel.
Despite the morning decline, elevated crude prices remain a major concern for Indian equities, given the country's dependence on imported oil.
Major cryptocurrencies extended their declines on Thursday morning.
Bitcoin slipped below $80,200.
Ethereum traded below $2,320, while Solana fell below $100.
Sensex: 73,246.03 (-0.48%)
Nifty 50: 22,698.85 (-0.22%)
Bank Nifty: 54,267.40 (+0.54%)
Nifty Midcap 100: 57,274.70 (+0.43%)
Nifty Smallcap 100: 18,684.90 (+0.90%)
Dow Jones: 52,475.10 (+0.19%)
S&P 500: 7,743.98 (+0.28%)
Nasdaq Composite: 26,549.85 (+0.27%)
US dollar: ₹95.22 (+₹0.10)
Gold (per ounce): $4,068.60 (+$7.30)
Gold (per sovereign): ₹1,05,560 (+₹480)
Brent crude oil: $115.88 (+$1.44)
