Indian equities ended Monday on a firm note, though gains from tax cut optimism quickly tapered, leaving investors looking for fresh triggers. Sentiment was partly influenced by signs of progress in Ukraine peace talks in Washington, where US President Donald Trump met Ukrainian President Volodymyr Zelensky and European leaders, with hints of a possible trilateral meeting involving Russian President Vladimir Putin. However, until formal announcements emerge, markets are unlikely to react strongly.
In early Tuesday trade, Asian markets and US futures were in the red, suggesting a cautious start for Indian equities. On Monday night, Gift Nifty futures closed at 25,012.50 and were trading between 24,986 and 25,015 early Tuesday, pointing to a modestly positive opening.
European markets closed mixed on Monday, with Ukraine uncertainty weighing on French and German indices. Danish drug-maker Novo Nordisk surged 6.6 percent after the US Food and Drug Administration approved its weight-loss drug Wegovy for an additional liver condition. Danish wind turbine manufacturer Vestas Wind rose 14.2 percent after the US extended favourable tax incentives.
US stocks were little changed on Monday as investors focused on Ukraine peace discussions and awaited signals from the Federal Reserve. The market is looking ahead to Fed Chair Jerome Powell’s comments at Friday’s Jackson Hole symposium, while minutes from the latest FOMC meeting, due Wednesday, will also be closely watched.
Retail earnings are in focus this week, with Walmart, Target, Home Depot and Lowe’s scheduled to report. After hours, Intel rose 6 percent following reports of US government investment talks and a $20 billion investment pledge from Japan’s SoftBank.
The Dow Jones Industrial Average slipped 34.30 points, or 0.08 percent, to close at 44,911.82. The S&P 500 edged down 0.01 percent to 6,449.15, while the Nasdaq Composite rose 0.03 percent to 21,629.77. US futures were flat to slightly mixed early Tuesday.
Indian benchmarks jumped sharply on Monday after the government moved to reduce GST rates and following a sovereign rating upgrade. The rally, however, faded by the close as profit-taking set in.
The Nifty 50 rose as much as 1.5 percent intraday to 25,022 before ending 245.65 points, or 1 percent, higher at 24,876.95. The Sensex climbed 676.09 points, or 0.84 percent, to 81,273.75. Bank Nifty added 0.71 percent to 55,734.90, while the Nifty Midcap 100 and Smallcap 100 gained 1.08 percent and 1.38 percent respectively.
Auto stocks led the charge on hopes that lower GST would boost sales. The Nifty Auto index advanced 4.18 percent, with Maruti Suzuki surging 8.9 percent past ₹14,000, Hyundai Motor up 9.16 percent, Ashok Leyland 8.2 percent, TVS Motor 6.39 percent and Hero MotoCorp 5.99 percent. Tyre makers also rallied 3–6 percent, led by Apollo Tyres.
Consumer durables gained strongly, with Voltas, Blue Star, PG Electroplast, Amber, Godrej Appliances and Havells climbing 5–9 percent. FMCG majors including HUL, Britannia, Nestlé and Dabur also advanced on expectations of lower taxes boosting demand.
Among other movers, PVC resin producers such as DCW, Chemplast Sanmar, Astral and Supreme Industries rose after anti-dumping duties were imposed on imports. Bajaj Finance and L&T Finance gained following the ratings upgrade. IT, pharma and healthcare stocks, however, lagged.
Market breadth was positive: on the BSE, 2,499 stocks advanced versus 196 that declined. On the NSE, 2,012 stocks gained while 1,047 fell. Foreign investors were net buyers of ₹550.85 crore in the cash segment, while domestic institutions bought shares worth ₹4,103.81 crore.
Gold started the week subdued as investors weighed Ukraine negotiations and Fed policy expectations. Spot gold fell $2.80 to $3,333.10 per ounce, trading between $3,332 and $3,336 early Tuesday. In Kerala, gold prices were unchanged at ₹74,200 per sovereign. Silver held at $37.98 per ounce.
The dollar index closed marginally higher at 98.17. The euro eased to $1.1663, sterling to $1.3502, and the yen to 147.97 per dollar. The rupee strengthened 20 paise to close at 87.35 per dollar after the ratings upgrade. US 10-year bond yields rose to 4.335 percent.
Crude oil extended gains, with Brent settling at $66.60 a barrel, WTI at $63.32 and Murban at $69.13. Natural gas prices fell 4 percent. Bitcoin swung sharply, dropping to $115,000 before rebounding above $116,400. Ether slipped below $4,330.
Analysts see near-term support for Nifty at 24,815 and 24,750, with resistance expected at 24,980 and 25,085.
Sensex 30: 81,273.75 (+0.84%)
Nifty 50: 24,876.95 (+1.00%)
Bank Nifty: 55,734.90 (+0.71%)
Midcap 100: 57,113.15 (+1.08%)
Smallcap 100: 17,790.40 (+1.38%)
Dow Jones: 44,911.82 (−0.08%)
S&P 500: 6,449.15 (−0.01%)
Nasdaq: 21,629.77 (+0.03%)
Dollar index: 98.17
Rupee: 87.35 per dollar (+0.20)
Gold: $3,333.10/oz (−$2.80)
Gold (India): ₹74,200/sovereign (unchanged)
Brent crude: $66.60 (+$0.75)
