After yesterday's remarkable rally, some profit-taking likely today

After Thursday's significant rally, the Indian markets may witness some profit-taking today. However, the market is set to open on a positive note.

The certainty of an interest rate cut in the US next week boosted markets yesterday. However, inflation and industrial production data released in India yesterday were not very encouraging. Globally, crude oil surged 5% over two days, which is not favourable for the markets, and gold is also on the rise. The increase in industrial metals is expected to lift steel and other metal stocks. Foreign cues this morning are not very exciting.

In the derivatives market, Gift Nifty closed at 25,405 on Thursday night and opened slightly lower at 25,390 this morning. This indicates a mildly positive opening for the Indian markets today.

Global markets show mixed trends

European markets climbed by 1% on Thursday, spurred by the European Central Bank’s decision to cut interest rates by 0.25%. This is the second rate cut in recent times.

US markets, after an early dip, closed higher on Thursday. The Dow Jones and S&P indices are just 1.5% below their record highs. Inflation data aligned with expectations, offering support to the markets.

The Dow Jones gained 235.06 points (0.58%) to close at 41,096.80. The S&P rose 41.63 points (0.75%) to end at 5,595.76, while the Nasdaq surged 174.15 points (1.00%) to finish at 17,569.70.

Tech stocks, including Nvidia, are on the rise. Nvidia has surged 16% this week alone, buoyed by robust demand for AI chips, as mentioned by its CEO, Jensen Huang.

US futures are slightly higher this morning, with the Dow, Nasdaq, and S&P all up by less than 0.1%. The yield on US 10-year Treasury bonds rose to 3.649%.

Asian markets are also showing minor gains today. Japan’s Nikkei opened higher but is now volatile. There are rumours of interest rate cuts in China’s housing sector, which has helped the Chinese markets recover from a six-year low.

Indian markets surge on Thursday

Thursday was a remarkable day for the Indian markets. After a choppy morning session, the markets rallied sharply in the afternoon. It was the best performance in three months, with the Sensex crossing 83,000 for the first time, touching 83,116.19, and Nifty setting a new record at 25,433.35.

On the NSE, 1,729 stocks gained, while 1,003 declined. On the BSE, 2,346 stocks advanced, and 1,609 fell.

The Sensex closed 1,439.55 points higher (1.77%) at 82,962.71, while the Nifty rose 470.45 points (1.89%) to close at 25,388.90. Bank Nifty gained 1.49% (762.40 points) to finish at 51,772.40.

The midcap index climbed 1.19% (702.25 points) to 59,640.30, and the smallcap index rose 1.01% to end at 19,354.75.

Foreign institutional investors purchased shares worth ₹7,695 crore on Thursday, while domestic institutions sold ₹1,800.54 crore worth of shares.

Although the markets closed nearly 2% higher yesterday, a massive rally is not expected today. The heavy buying from foreign investors could trigger profit-taking by domestic funds. Many option traders faced significant losses yesterday on the weekly expiry day.

Rising inflation

Retail inflation in India rose slightly in August to 3.7%, up from 3.6% in July, exceeding expectations. Food inflation hit 5.7%. However, core inflation, excluding fuel and food, saw only a marginal decline. Inflation is expected to rise above 4% again in September.

The industrial production index rose to 4.8% in July, compared to 4.7% in June, though it was lower than the 6.2% growth in July last year.

Gold hits record, crude oil surges

Gold surged to a record high, rising 2% on Thursday to close at $2,559.30 per ounce. This morning, it stands at $2,563. December futures prices touched $2,591. Expectations of a rate cut by the US Fed have driven the gold rally. As interest rates fall, large investors tend to move from bonds to gold and equities.

In Kerala, gold prices fell by ₹80 per sovereign to ₹53,640 on Thursday, but prices are expected to rise significantly today.

Silver prices also climbed to $29.90 per ounce.

The dollar index fell significantly on Thursday, closing at 101.37, and dropped further to 101.06 this morning.

The rupee gained from the weaker dollar, with the dollar closing 1 paise lower at ₹83.97 on Thursday. The Reserve Bank of India intervened strongly in the market.

Crude oil prices surged again, with Brent crude rising 2% to close at $71.97 per barrel on Thursday, and climbing further to $72.43 this morning. WTI crude is at $69.40, and UAE's Murban crude is priced at $72.35.

Cryptocurrencies saw a slight rise, with Bitcoin reaching $58,100 and Ether at $2,355.

Industrial metals continued their upward trend, with copper up 1.20% to $9,115.50 per tonne, aluminium rising 1.91% to $2,415.67 per tonne, and nickel, zinc, tin, and lead also recording gains.

Market indicators (on Thursday, September 12)

• Sensex: 82,962.71 (+1.77%)

• Nifty: 25,388.90 (+1.89%)

• Bank Nifty: 51,772.40 (+1.49%)

• Mid-cap 100: 59,640.30 (+1.19%)

• Small-cap 100: 19,354.75 (+1.01%)

• Dow Jones: 41,096.80 (+0.58%)

• S&P 500: 5,595.76 (+0.75%)

• Nasdaq: 17,569.70 (+1.00%)

• Dollar ($): ₹83.97 (-₹0.01)

• Dollar Index: 101.37 (-0.31)

• Gold (ounce): $2,559.30 (+$47.80)

• Gold (sovereign): ₹53,640 (-₹80)

• Crude (Brent): $71.97 (+$1.36)