Relief in retail inflation, disappointment in industrial production. The economic indicators released yesterday presented contrasting outcomes. While the increase in retail inflation in the United States weighed on markets there, Asian markets rose today. This shift is expected to influence the mood of the Indian market today and potentially pave the way for gains.
Prime Minister Narendra Modi's discussions with US President Donald Trump in Washington today are critical. India is hopeful about Trump's suggestion that the US will offer incentives to countries that lower tariffs on US products.
Retail inflation in January reached a five-month low of 4.3 percent, mainly due to a reduction in food prices. Meanwhile, the industrial production index for December grew by only 3.2 percent, compared to a 5 percent growth in November.
In the derivatives market, the Gift Nifty closed at 23,072, down from 23,140 earlier in the day. This suggests the Indian market is likely to start trading higher today.
European markets closed higher on Wednesday. German beer giant Heineken posted a better-than-expected profit and announced a €1.5 billion share buyback, boosting shares by 14 percent.
After initially dropping 1 percent, market indexes in the US ended down by half a percent as retail inflation rose more than anticipated. US retail inflation for January increased by 3 percent, while core inflation, which excludes fuel and food prices, climbed by 3.3 percent. Tech giants such as Amazon and Alphabet saw declines due to the certainty that a rate cut would be delayed. However, auto and pharmaceutical stocks rose following reports that President Trump plans to reduce tariffs on medicines and vehicles from countries that lower tariffs on US goods. The Dow Jones Industrial Average is expected to release data on jobless claims and wholesale prices today.
The Dow Jones Industrial Average fell by 225.09 points, or 0.50 percent, to 44,368.56. The S&P 500 index closed down 16.53 points (0.27%) at 6,051.97, while the Nasdaq index rose by 6.09 points (0.03%) to 19,649.95.
In futures, the Dow Jones Industrial Average rose by 0.17 points, the S&P 500 index increased by 0.19 points, and the Nasdaq Composite index gained 0.41 points.
Most Asian markets rose in the morning. In Japan, the Nikkei rose by more than 1 percent, while Chinese stocks, which surged the previous day, continued their upward movement.
The Indian market, which had been under pressure due to Trump's tariff threat, ended in the red for the sixth consecutive day. However, the market closed with a marginal loss after a significant dip in the morning and a subsequent rebound. The Sensex dropped to a low of 75,388 but later rose to 76,460. Similarly, the Nifty fell from 22,798 to 23,144.
While the major indices experienced slight declines yesterday, the midcap and smallcap indices saw a decrease of around 0.25 percent. The Bank Nifty rose.
Sectors such as realty, consumer durables, auto, pharma, healthcare, oil & gas, media, and IT saw losses yesterday, while the metal and financial sectors registered gains.
On Wednesday, the Nifty closed 26.55 points (0.12%) lower at 23,045.25, while the Sensex finished 122.52 points (0.16%) lower at 76,171.08. The Bank Nifty rose by 76.05 points (0.15%) to 49,479.45. The midcap index dropped by 0.26 percent to 50,756.40, while the smallcap index closed at 16,033.00, down by 0.26 percent.
Foreign investors sold a net amount of ₹4,969.30 crore in the cash market on Wednesday, while domestic funds and financial institutions purchased a net ₹5,929.24 crore.
Investments in mutual funds in India saw strong inflows in January, with ₹39,688 crore flowing into various funds, representing a 3.56 percent decline compared to December.
The Reserve Bank of India has lifted restrictions on credit card and mobile banking activities of Kotak Mahindra Bank.
The upward-to-downward ratio in the broader market continues to favour the downside. While 1,477 stocks rose on the BSE, 2,504 stocks fell. On the NSE, 1,154 shares rose, and 1,685 shares declined.
If the Nifty weakens, support may be found in the 22,800-22,700 range. If it rises, resistance could be encountered at 23,300. Nifty may find support at 22,870 and 22,780 today, with resistance levels at 23,130 and 23,210.
Manappuram Finance, Hindalco, IPCA Laboratories, Godfrey Phillips, Deepak Netright, Afcons Infra, Ansel Housing, SJVN, United Breweries, and others are set to release their third-quarter results today.
Muthoot Financials reported a 42.8 percent increase in net interest income, with a 32.7 percent rise in net profit.
Honasa Consumer's revenue grew by 6 percent, but its profit increased by only 0.5 percent.
Bharat Forge’s revenue fell by 7.4 percent, and its profit dropped by 8.4 percent. Bharat Forge will collaborate with Veda Aeronautics to manufacture drones and other products.
P N Gadgil Jewelers' revenue rose by 23.5 percent, with net profit soaring by 49.4 percent.
Landmark Cars saw a 24.6 percent increase in revenue, though net profit fell by 37.7 percent.
Balaji Amines' revenue dropped by 18.4 percent, and its net profit fell by 32.8 percent.
Gold prices also fluctuated yesterday. The price for April delivery rose to $2,968.50 per ounce before falling to $2,907, finally closing at $2,926.50. The spot price ended at $2,904.60 after these fluctuations.
Investment trusts are also purchasing gold, with reports suggesting that central banks and commercial banks in China and Russia are experiencing a shortage of gold bars. The conclusion is that the wealthy are transferring substantial savings into gold due to global uncertainty.
Gold prices in Kerala dropped by ₹560 per ounce on Wednesday to ₹63,520. The rupee may strengthen today if the exchange rate falls.
Silver prices rose to $32.18 per ounce.
The rupee, which made a strong comeback on Tuesday, weakened once more yesterday. Exporters did not offload dollars, and speculators did not reduce short positions, as the Reserve Bank had hoped.
The dollar, which had dropped to ₹87.50 in the morning, closed at ₹86.89, gaining 6 paise.
The dollar index, which fluctuated during the day, closed at 107.94, rising slightly to 107.96 this morning.
US bond prices fell again, boosting investment returns in them. The yield on 10-year bonds rose to 4.63 percent from 4.54 percent due to higher-than-expected US retail inflation. This led to the conclusion that interest rate cuts would not occur before September. US Federal Reserve Chairman Jerome Powell has repeatedly stated that rate cuts will be prolonged.
Crude oil reversed its gains and started to decline. This was due to an unexpected increase in stock levels in the US. Brent crude oil fell by 2.5 percent, from $77 to $74.97, and dropped to $74.82 this morning. WTI crude oil reached $71.05. UAE’s Murban crude rose to $77.29.
Cryptocurrencies are on the rise again. Bitcoin rose above $97,700 yesterday, while Ether’s price increased to $2,750.
Industrial metals showed mixed movements yesterday. Copper rose by 1.14 percent to $9,344.29 per tonne, while aluminium dropped by 0.52 percent to $2,623.90. Lead fell by 0.89 percent, tin rose by 2.23 percent, nickel gained 0.17 percent, and zinc increased by 1.87 percent.
Sensex 30: 76,171.08 (-0.16%)
Nifty50: 23,045.25 (-0.12%)
Bank Nifty: 49,479.45 (+0.15%)
Midcap 100: 50,756.40 (-0.26%)
Smallcap 100: 16,033.00 (-0.26%)
Dow Jones: 44,368.60 (-0.50%)
S&P: 6,051.97 (-0.27%)
Nasdaq: 19,649.90 (+0.03%)
Dollar ($): ₹86.89 (+₹0.06)
Dollar Index: 107.94 (-0.02)
Gold (ounce): $2,904.60 (+$7.00)
Gold (pound): ₹63,520 (-₹560.00)
Crude (Brent) Oil: $74.97 (-$2.03)
