Iran has put forward new conditions for reopening the Strait of Hormuz, including a demand for the US to withdraw from West Asia and provide compensation. US President Donald Trump has now adopted an unexpected wait-and-watch stance, saying he is prepared to wait until economically strained Iran gives in.
A short video released by Iran featuring its yet-to-be-seen supreme leader has further fuelled speculation over whether Mojtaba Khamenei is still alive. Some appointments announced in his name have also raised concerns about the growing influence of hardliners.
Israeli Prime Minister Benjamin Netanyahu said he would ignore US announcements concerning Gaza. Meanwhile, Iran-aligned Houthi forces attacked a Saudi refinery after Saudi Arabia, Turkey and Pakistan signed a mutual defence agreement.
Despite these dramatic developments, crude oil prices have risen only marginally. Asian markets are trading higher across the board, while US stock futures are mixed. Gold has edged lower.
In derivatives trading at Gift City, Gift Nifty closed at 24,641.50 on Friday night. It climbed to 24,688 this morning before slipping to around 24,650, indicating a mildly weak opening for Indian equities today.
US markets closed at record levels on Friday, after weaker-than-expected July employment data reduced expectations of further interest-rate hikes. All three major indices gained, with the S&P 500 closing at a record high.
For the week, the S&P 500 rose 3.6 percent, the Nasdaq gained 5.2 percent and the Dow advanced 3 percent. A rally in semiconductor stocks provided strong support to the Nasdaq.
Non-farm payrolls were expected to increase by 83,000 in July, but instead fell by 23,000. Payroll figures for May and June were also revised lower. The unemployment rate fell to 4.1 percent, largely because some people dropped out of the labour force.
The data have strengthened expectations that a rate hike in September is unlikely.
Elon Musk's SpaceX gained sharply last week after several weeks of weakness. The stock rose 15.83 percent on Friday and 25.77 percent for the week. The rise after anchor investors began selling has strengthened investor confidence. Tesla also gained, while Nvidia surged 13.33 percent during the week.
The Dow Jones Industrial Average rose 151.83 points, or 0.28 percent, on Friday to close at 54,036.93. The S&P 500 gained 47.68 points, or 0.62 percent, to 7,757.64, while the Nasdaq Composite advanced 342.26 points, or 1.30 percent, to 26,690.62.
US stock futures are mixed today amid uncertainty over the Strait of Hormuz. Dow Jones futures were down 128 points, or 0.24 percent, while S&P 500 futures slipped 9 points, or 0.11 percent. Nasdaq futures gained 28 points, or 0.09 percent.
In New York trading, HDFC Bank gained 1.19 percent during regular hours on Friday and ended unchanged at $23.63 in extended trading. ICICI Bank fell 0.85 percent during regular trading and remained unchanged at $30.22 in after-hours trading.
Infosys gained 1.38 percent during regular trading before slipping 0.16 percent in extended trading to close at $12.51. Wipro rose 1.51 percent during regular hours and ended unchanged at $2.02 in extended trading.
European markets closed higher on Friday, with software and semiconductor stocks recording strong gains.
Asian markets are trading higher despite the reduced likelihood of an agreement to reopen the Strait of Hormuz. South Korea's Kospi gained around 1 percent, while Japan's Nikkei rose about 2 percent. Taiwan, Hong Kong and Shanghai indices also advanced.
Retail investors opposed to the new Closing Auction Session (CAS) mechanism for determining the closing prices of stocks have called for a trading boycott on Wednesday.
The boycott call is being circulated on social media by individual investors rather than organised investor groups. They argue that CAS benefits funds and institutions at the expense of retail investors.
On Friday, there was also a significant difference between cash-market closing prices and CAS closing prices. Exchange officials have said the difference is expected to narrow as market participants become familiar with the new system. SEBI has maintained that the mechanism is necessary to attract more foreign funds to the Indian market.
Indian equities declined on Friday, led by weakness in banking and financial stocks. IT, auto and metal stocks gained.
Large financial companies came under pressure after the Reserve Bank of India's draft regulations proposed restricting NBFCs from providing revolving credit facilities to customers. Bajaj Finance fell 5.9 percent, Bajaj Finserv declined 4.2 percent, Jio Financial Services dropped 2.39 percent and Shriram Finance fell 2.28 percent.
Revolving credit provides a facility similar to that offered through credit cards.
Foreign investors were net buyers on Friday, purchasing shares worth Rs 480.29 crore in the cash market. Domestic funds were also net buyers, with purchases worth Rs 235.56 crore. During the first week of August, foreign investors invested Rs 12,921 crore in Indian equities, compared with total investments of Rs 26,200 crore in July.
The Sensex fell 455.59 points, or 0.58 percent, on Friday to close at 78,499.20. The Nifty 50 declined 65.35 points, or 0.27 percent, to 24,570.65. Bank Nifty lost 317.20 points, or 0.55 percent, to 57,746.45.
The Nifty Midcap 100 gained 136.75 points, or 0.22 percent, to 63,463.55, while the Nifty Smallcap 100 slipped 10.45 points, or 0.05 percent, to 19,867.80.
More stocks declined on the BSE. While 1,985 stocks advanced, 2,283 declined. On the NSE, 1,675 stocks gained and 1,649 fell.
Expectations of lower interest rates drove gold sharply higher on Friday. Gold gained $101.40, or 2.39 percent, to close at $4,343.30 an ounce. However, worsening tensions in West Asia pushed prices lower this morning, with gold falling to around $4,321.
In Kerala, 22-carat gold rose by Rs 1,120 per sovereign on Friday to Rs 1,10,920. The price increased by another Rs 800 on Saturday to Rs 1,11,720.
Silver gained 2.4 percent on Friday to close at $63.46 an ounce and rose to $63.68 this morning. Platinum stood at $1,741, palladium at $1,348 and rhodium at $8,250.
Industrial metals moved in different directions on Friday.
Copper, which had hit a record $14,453.60 a tonne, fell 1.48 percent to $14,239 following profit-booking. Aluminium jumped 1.19 percent to $3,279.50. Nickel also gained, while zinc, tin and lead declined.
International rubber prices edged higher, while prices in Kerala remained unchanged.
In Bangkok, RSS 1 rose to $284.50 per quintal and RSS 3 to $281.00. In Kerala, RSS 4 remained at Rs 28,400 per quintal.
Cocoa prices edged higher on Friday to $5,782 a tonne. Ghana's cocoa board expects production to fall by 16 percent because of adverse weather conditions. Production in Ivory Coast is also expected to decline by more than 10 percent. The two countries are the world's largest cocoa producers.
Arabica coffee gained 3.20 percent to $3.16 a pound. Concerns are growing that the El Niño weather phenomenon could reduce production next year.
The US Dollar Index fell on Friday to close at 99.54 but rose to 99.67 this morning.
The euro traded at $1.1554 and the pound at $1.3486. The Japanese yen strengthened to 158.06 per dollar, while the Chinese yuan remained at 6.75 to the dollar.
The yield on US 10-year Treasury bonds fell to around 6.666 percent this morning.
The Indian rupee initially gained on Friday before ending with a marginal loss. The dollar rose two paise to close at Rs 95.20.
In the offshore non-deliverable forward (NDF) market, the dollar was quoted at Rs 95.21 this morning. The Chinese yuan was at Rs 14.06 and the euro at Rs 109.56.
Crude oil prices edged higher on Friday as hopes of an agreement on reopening the Strait of Hormuz diminished.
Brent crude closed at $83.55 a barrel and rose another 1.3 percent to $84.64 this morning. WTI crude was at $78.99.
Cryptocurrencies are trading in different directions. Bitcoin moved above $65,000 this morning, while Ether slipped below $1,920. Solana rose to $76.75.
(Friday, August 7)
Sensex 78,499.20 -0.58%
Nifty 50 24,570.65 -0.27%
Bank Nifty 57,746.45 -0.55%
Nifty Midcap 100 63,463.55 +0.22%
Nifty Smallcap 100 19,867.80 -0.05%
Dow Jones 54,036.93 +0.28%
S&P 500 7,757.64 +0.62%
Nasdaq 26,690.62 +1.30%
Dollar ₹95.20 +₹0.02
Gold (ounce) $4,343.30 +$103.30
Gold (sovereign) ₹1,10,920 +₹1,120
Gold (Saturday) ₹1,11,720 +₹800
Brent crude $83.55 +$0.47
