Signs of easing tensions in West Asia and a sharp decline in crude oil prices have improved sentiment across global markets. Technology stocks, which suffered a steep sell-off on Tuesday, are showing signs of recovery, lifting Asian markets and US futures. However, expectations that the US Federal Reserve could resume interest rate hikes have strengthened the dollar and pushed gold prices lower.
Gift Nifty, which closed at 23,857.50 on Tuesday night, climbed to 23,878 in early trading on Wednesday, indicating a mildly positive opening for Indian equities.
Negotiations between the US and Iran in Switzerland are progressing, while shipping movement through the Strait of Hormuz has improved. US President Donald Trump warned that Washington could withdraw from the talks if Iran refuses international nuclear inspections.
US Trade Representative Jamieson Greer met Commerce Minister Piyush Goyal in New Delhi to continue negotiations on a bilateral trade agreement. India is seeking lower tariff rates than those offered to several other Asian nations and is reportedly pushing for a shorter validity period for the proposed deal.
India's southwest monsoon rainfall remained 42.3 percent below normal as of June 23, according to the weather department. Although the monsoon has advanced towards Mumbai after a two-week pause, nearly 72 percent of the country continues to face rainfall deficits exceeding 20 percent.
Major agricultural regions have received between 40 percent and 90 percent less rainfall than usual, largely due to El Niño conditions. A prolonged deficit could affect agricultural output and weigh on GDP growth.
US equities declined sharply on Tuesday as investors reassessed the scale of spending on artificial intelligence projects. The technology-led correction dragged both the Nasdaq and S&P 500 lower.
The concerns triggered a steep sell-off in South Korea on Tuesday, with chipmakers Samsung and SK Hynix leading losses after having driven the market to record highs in recent weeks.
US memory-chip manufacturers Micron and SanDisk fell 13 percent each. Micron, whose shares have surged more than sevenfold over the past year, is scheduled to announce third-quarter earnings after trading hours today.
SpaceX shares recovered one percent after three consecutive days of losses, though the stock remains close to its listing price. The company recently raised $25 billion through a bond issue.
The Dow Jones fell 45.87 points (0.09 percent) to close at 51,666.84. The S&P 500 lost 107.33 points (1.44 percent) to end at 7,365.46, while the Nasdaq Composite dropped 579.56 points (2.22 percent) to 25,587.04.
Among Indian ADRs traded in New York, HDFC Bank closed unchanged at $25.02 after a weak session. ICICI Bank ended at $27.96 after further losses in after-hours trading. Infosys gained strongly in extended trading to close at $11, while Wipro advanced 2.23 percent to $2.29.
US index futures rebounded after Tuesday's sharp fall. Dow futures were up 13 points, S&P 500 futures gained 13 points, and Nasdaq futures rose 140 points in early trading.
The global technology sell-off weighed on European markets as well. The UK's FTSE 100 slipped only marginally despite political uncertainty following the Prime Minister's resignation announcement.
Danish pharmaceutical giant Novo Nordisk gained five percent after a new weight-loss drug launched by US-based Eli Lilly failed to create major disruption in the obesity-treatment market. German software major SAP also rallied on strong earnings growth.
Asian markets opened mostly higher on Wednesday. Japan's Nikkei recovered from early losses, while Australia's benchmark index gained 0.10 percent.
South Korea's Kospi rebounded about five percent after Tuesday's 10 percent plunge, helped by a nine percent jump in Samsung shares. Hong Kong rose 0.35 percent, while Shanghai slipped 0.40 percent.
Weak global technology stocks, falling metal prices and a stronger dollar triggered a broad-based decline in Indian equities on Tuesday, wiping out nearly ₹5.5 lakh-crore in market capitalisation.
Foreign portfolio investors were marginal net buyers, purchasing equities worth ₹17.86 crore. Domestic institutions added another ₹680.21 crore.
The Sensex fell 893.39 points (1.16 percent) to close at 76,200.68, while the Nifty lost 278.80 points (1.16 percent) to settle at 23,824.10. Bank Nifty dropped 751.85 points (1.30 percent) to 57,183.75.
Market breadth remained weak, with declining shares outnumbering gainers by nearly two to one.
All four Kerala-based commercial banks ended lower.
Rajesh Exports, which had been under pressure following allegations relating to financial disclosures, hit the upper circuit for the seventh consecutive session even as Enforcement Directorate officials reportedly conducted inspections at company premises.
A stronger dollar and growing expectations of a possible Federal Reserve rate hike continued to weigh heavily on gold prices.
Spot gold plunged 1.92 percent on Tuesday, falling $80.60 to close at $4,112 per ounce. It slipped further to around $4,067 before recovering slightly to trade near $4,090.
Several global investment banks have lowered their long-term gold price targets. While some still see upside if investor demand returns, forecasts have become more cautious amid concerns over US interest rates.
In Kerala, 22-carat gold fell ₹2,480 per sovereign to ₹1,06,040.
Silver dropped six percent to $61.93 per ounce and remained under pressure on Wednesday morning. Platinum traded at $1,633, palladium at $1,203 and rhodium at $7,600.
Industrial metals witnessed heavy selling. Copper fell 2.26 percent to $13,333.75 per tonne, while aluminium dropped 4.67 percent to $3,251.22. Zinc, nickel, tin and lead also ended lower.
Rubber prices continued to soften in overseas markets. In Bangkok, RSS-1 fell to $318 per quintal and RSS-3 to $314.50.
In Kerala, RSS-4 remained steady at ₹27,300 per quintal.
Cocoa rose 0.87 percent to $4,661 per tonne amid concerns that El Niño could affect production in West Africa.
The US dollar index climbed to 101.45 in early trade after ending Tuesday at 101.41.
The euro weakened to $1.1371 and the pound to $1.3191. The Japanese yen slipped to 161.58 per dollar, remaining close to its weakest level in four decades. The Chinese yuan weakened to 6.79 per dollar.
The yield on the 10-year US Treasury note eased to 4.491 percent.
The Indian rupee ended six paise lower at ₹94.74 against the dollar on Tuesday.
In the offshore non-deliverable forward market, the dollar traded around ₹94.82 on Wednesday morning. The euro weakened to ₹107.77, while the yuan slipped to ₹13.95.
Crude oil prices continued to decline as concerns over supply disruptions eased.
Brent crude, which traded above $81 a barrel over the weekend, fell to around $76.32 before recovering slightly. WTI crude slipped to $72.47 a barrel.
Cryptocurrency markets remained weak. Bitcoin slipped below $62,750, while Ether traded below $1,670 and Solana remained under $70.
Sensex: 76,200.68 (-1.16%)
Nifty 50: 23,824.10 (-1.16%)
Bank Nifty: 57,183.75 (-1.30%)
Nifty Midcap 100: 62,070.35 (-1.05%)
Nifty Smallcap 100: 18,805.90 (-0.48%)
Dow Jones: 51,666.84 (-0.09%)
S&P 500: 7,365.46 (-1.44%)
Nasdaq: 25,587.04 (-2.22%)
Dollar/Rupee: ₹94.74 (+₹0.06)
Gold (per ounce): $4,112.00 (-$80.60)
Gold (per sovereign): ₹1,06,040 (-₹2,480)
Brent crude: $77.08 (-$0.82)
