Uncertainty surrounding inflation, interest rates, and the dollar is shaking Western markets. This volatility has also impacted Indian markets, with investors withdrawing funds and inflationary pressure remaining high.
The indication is that market fluctuations will continue. A drop in crude oil prices below $80 provides some relief. Although the rupee remained weak yesterday, a slight decline in the dollar index might ease pressure on the rupee.
In December, retail inflation saw a marginal decline, dipping from 5.48% to 5.22%. Meanwhile, the wholesale price index for December showed inflation at 2.37%, up from 1.89% in November, suggesting that inflationary trends may intensify. This diminishes the likelihood of an interest rate cut in February.
The US government’s move to control the export of graphics processing units (GPUs) could hinder India's progress in artificial intelligence. It plans to require licences for such purchases. Former President Donald Trump’s response to this remains unclear.
In the derivatives market, GIFT Nifty closed at 23,300 on Tuesday night and rose to 23,310 this morning. This indicates that Indian markets may open on a positive note today.
European markets gained significantly in early trade on Tuesday but trimmed gains by the close.
US markets were mixed on Tuesday. The Dow Jones and S&P 500 rose slightly, while the Nasdaq fell as tech stocks declined. Wholesale price data showed limited growth, and retail inflation data is expected today. Analysts anticipate December's inflation at 2.9%, up from 2.7% in November.
On Tuesday, the Dow Jones rose by 221.16 points (+0.52%) to 42,518.28, while the S&P 500 gained 6.69 points (+0.11%) to close at 5842.91. The Nasdaq slipped 43.71 points (-0.23%) to end at 19,044.39.
US futures are trading higher this morning, with the Dow up 0.09%, S&P 0.05%, and Nasdaq 0.13%. The US 10-year bond yield remains steady at 4.79%.
Asian markets gained this morning, with Japan’s Nikkei rising 0.5%. South Korea and Australia also saw their indices increase.
Indian markets saw a slight recovery yesterday after four days of decline. However, it’s premature to say they’ve shaken off bearish trends. The December's wholesale price inflation data and trends continue to unsettle markets. The trajectory of the US dollar and crude oil will be pivotal.
Midcap and smallcap stocks, which fell more than the benchmark indices on Monday, surged higher yesterday. The major indices lost a significant portion of their morning gains by the close.
On Tuesday, the Nifty climbed 90.10 points (+0.39%) to 23,176.05, while the Sensex rose 169.62 points (+0.22%) to 76,499.63. Bank Nifty surged 687.90 points (+1.43%) to end at 48,729.15. Midcap and smallcap indices also registered strong gains, rising 2.45% and 1.98%, respectively.
All sectors, except IT and FMCG, posted gains yesterday. Public sector banks, metals, media, and auto stocks led the rally.
Adani Group stocks surged yesterday, with the group’s market cap rising by ₹1.08 lakh crore. Adani Power rose 19.99%, Green Energy 13.52%, Energy Solutions 12.23%, Total Gas 6.43%, NDTV 6.07%, Enterprises 7.05%, Ports 5.25%, Ambuja Cement 4.66%, and ACC 4.71%. Robust third-quarter performance reports drove the rally.
Kalyan Jewellers, which had fallen for seven consecutive days, rose 4.07% yesterday. Other gainers included FSLT (3.5%), Cochin Shipyard (5%), and Federal Bank (3.18%). Manappuram General Finance climbed 5.7%.
Disappointing results led to an 8.7% drop in HCL Tech. The resignation of United Spirits’ CEO caused a 5% dip in its stock, while slower profit growth pulled Angel One down by 6%.
NTPC Green and Mazagon Dock Shipbuilders surged 10% on strong growth expectations.
Foreign investors net sold ₹8132.26 crore worth of equities on Tuesday, while domestic funds and financial institutions net bought ₹7901.06 crore. Foreign investors have sold ₹34,382.56 crore worth of equities this month so far.
In the broader market, advancing stocks outnumbered decliners. On the BSE, 2823 stocks rose, while 1144 fell. On the NSE, 2117 stocks advanced, and 700 declined.
Nifty needs to breach 23,350 for further upward momentum. Otherwise, support levels between 23,000 and 22,800 will sustain accumulation. Short-term support for Nifty is at 23,140 and 23,060, while resistance is expected at 23,245 and 23,320.
HDFC Life, L&T Technology Services, Ceat, Bank of Maharashtra, and Oracle are set to announce their results today.
Network 18 Media’s third-quarter revenue growth and profit margin declined.
Shoppers Stop’s third-quarter revenue rose by 11.5%, while profit surged 41.7%. Banaras Hotels posted a 15.6% revenue increase and 20% profit growth. Hathway Cable’s revenue grew by 1.3%, with profits soaring by 39%. Sula Vineyards’ overall revenue declined by 0.7%.
A ₹3167 crore financial agreement is likely for mining operations at Banahardi coal block in Jharkhand. NTPC and Jharkhand Bijli Vitran Nigam will jointly undertake the project.
Welspun Corporation has signed an agreement with Saudi Aramco to set up an LSAW pipe manufacturing unit in Saudi Arabia with a capacity of 350,000 tonnes.
Premier Energies secured a contract to supply ₹1460 crore worth of solar modules and cells to two energy producers.
Uncertainty around interest rates and the dollar continues to impact gold prices. Retail inflation data, due today, will offer more clarity. Gold prices, which fell on Monday, rebounded significantly yesterday, with an ounce gaining $15.30 to close at $2678.80. This morning, it dropped slightly to $2674.
In Kerala, gold prices fell by ₹80 per sovereign on Tuesday to ₹58,640.
Silver prices rose to $29.87 an ounce.
Uncertainty over interest rates, inflation, and Trump’s policies pushed the dollar index lower. Currencies such as the euro gained slightly. The dollar index dropped 0.69 points to close at 109.27 and fell further to 109.23 this morning.
The rupee attempted to rise on Tuesday but failed. It opened 9 paise lower at ₹86.49 per dollar but ended the day at ₹86.63.
In the forward market, the dollar is trading at ₹86.69.
Crude oil prices fell further yesterday. Brent crude closed at $80.42 on Tuesday and dropped to $79.92 this morning. WTI crude is trading at $77.90, while UAE’s Murban crude stands at $81.67.
Cryptocurrencies remained volatile yesterday amid uncertainty over interest rates and the dollar. Bitcoin rose above $96,700, while Ethereum climbed to $3240.
Sensex 30: 76,499.63 (+0.22%)
Nifty 50: 23,176.05 (+0.39%)
Bank Nifty: 48,729.15 (+1.43%)
Midcap 100: 53,676.50 (+2.45%)
Smallcap 100: 17,257.80 (+1.98%)
Dow Jones: 42,518.28 (+0.52%)
S&P 500: 5842.91 (+0.11%)
Nasdaq: 19,044.39 (-0.23%)
Dollar ($): ₹86.63 (+₹0.05)
Dollar index: 109.27 (-0.69)
Gold (ounce): $2678.80 (+$15.30)
Gold (sovereign): ₹58,640 (-₹80.00)
Crude (Brent) oil: $80.42 (-$0.59)
