Bullish, but obstacles emerge for Nifty to sustain upward trajectory

Indian markets experienced an enthusiastic rally on Monday, but obstacles may dampen that momentum on Tuesday.

As uncertainty surrounding interest rates subsides, a new worry is emerging: a potential slowdown in the growth of technology companies. U.S. tech stocks fell yesterday, with Indian companies' ADRs dropping by up to 1% in after-hours trading. This sentiment is likely to influence the Indian markets today, especially after IT companies performed exceptionally well yesterday.

India’s Q1 GDP figures are set to be released this Saturday, with consensus predicting growth below 7%, largely due to reduced government spending. A lower growth figure could negatively impact market sentiment.

Crude oil prices have surged past $81 per barrel, adding further pressure on the markets. Fears of escalating conflicts in the Middle East are driving this increase.

In the derivatives market, GIFT Nifty closed at 25,036 on Monday night, and dipped to 25,015 this morning, before climbing back to 25,026. This indicates a likely weaker start for the Indian market today.

European and US markets

European markets closed with modest gains on Monday, but concerns over Middle Eastern tensions are growing. Meanwhile, U.S. markets had a mixed session; the Dow Jones hit a record high of 41,420.05 before closing with a slight gain, while the S&P and Nasdaq ended in the red, led by a decline in tech stocks. Nvidia dropped 2% ahead of its earnings announcement on Wednesday, as investors worry whether the company can sustain its recent stellar performance. However, Nvidia did see a slight uptick in after-hours trading.

Apple announced the replacement of CFO Luca Maestri after market hours, with its vice president Kevin Parekh stepping into the role. Mr Maestri will continue overseeing the IT and security divisions.

The yield on U.S. 10-year Treasuries decreased to 3.815%.

On Monday, the Dow Jones Index rose by 65.44 points (0.16%) to close at 41,240.52. The S&P 500 dropped by 17.77 points (0.32%) to end at 5616.84, while the Nasdaq fell by 152.03 points (0.85%) to close at 17,725.76.

U.S. futures are indicating a weaker start today, with the Dow down 0.10%, the S&P down 0.15%, and the Nasdaq down 0.16%.

Asian markets are trading mixed this morning, with Japan's Nikkei and South Korea's Kospi each down by about 0.5%.

Indian markets

The Indian markets saw a robust performance on Monday, with the Nifty 50 index climbing back above the 25,000 mark, boosted by sectors like metals, IT, realty, consumer durables, and oil & gas.

The Sensex rose by 611.90 points (0.75%) to close at 81,698.11, while the Nifty gained 187.45 points (0.76%) to finish at 25,010.60. The Bank Nifty rose by 0.42% (214.65 points) to close at 51,148.10.

The Midcap index increased by 0.64% to 58,931.15, while the Smallcap index climbed by 0.28% to 19,132.25.

Foreign investors bought shares worth ₹483.36 crore in the cash market on Monday, while domestic funds and institutions purchased shares worth ₹1,870.22 crore.

The market ended on a bullish note, but obstacles are emerging for the Nifty to sustain its upward trajectory. The U.S. tech stock dip and declining industrial metal prices in London are not good signs.

Today, the Nifty 50 index has support at 24,910 and 24,875 levels, with resistance around 25,040 and 25,080 levels.

Paytm founder Vijay Shekhar Sharma and other directors have received a SEBI show-cause notice over errors during the company's IPO. The stock fell by up to 9% yesterday. The company has downplayed the notice as nothing new.

Gold and crude oil prices surge

Gold briefly reached a record high yesterday, hitting $2,526 per ounce before profit-taking led to a close at $2,518.60. This morning, it is trading at $2,512. The December holiday pricing pushed gold to $2,550 per ounce.

In Kerala, gold prices remain steady at ₹53,560 per sovereign.

Silver is trading at $29.79 per ounce.

The dollar index rose on Monday to 100.85 and has climbed to 100.91 this morning.

The rupee made strong gains in the morning, with the dollar down by eight paise to ₹83.81 at the start of trading on Monday. However, the rupee lost its gains after the dollar index rose overseas, closing at ₹83.90.

Crude oil prices have surged again, driven by concerns over escalating tensions in the Middle East. Brent crude rose by 3%, closing at $81.43 per barrel. It has since dropped slightly to $81.12 this morning. WTI crude is at $77.06, while UAE's Murban crude is trading at $80.23.

Cryptocurrencies dipped slightly on Monday, with Bitcoin at $62,900 and Ethereum down to $2,690.

Market Indicators (Monday, August 26)

Sensex 30: 81,698.11 +0.75%
Nifty 50: 25,010.60 +0.76%
Bank Nifty: 51,145.10 +0.42%
Midcap 100: 58,931.15 +0.64%
Smallcap 100: 19,132.25 +0.28%
Dow Jones 30: 41,240.50 +0.16%
S&P 500: 5616.84 -0.32%
Nasdaq: 17,725.80 -0.85%
Dollar ($): ₹83.90 +₹0.01
Dollar Index: 100.85 +0.14
Gold (Ounce): $2,518.60 +$05.40
Gold (Sovereign): ₹53,560 +₹00
Crude (Brent) Oil: $81.43 +$02.41.