Impact of Powell's hints may ripple across markets; Nifty eyes 25000

The markets, poised to rise on hopes of an interest rate cut in the US, are now facing the threat of escalating tensions in the Middle East. US Federal Reserve Chairman Jerome Powell's statement at Jackson Hole about the likelihood of rate cuts starting next month boosted US markets on Friday, and the effects are expected to ripple through Indian markets today. However, the worsening conflict in the Middle East has pushed crude oil prices up, causing concern in the markets.

Nvidia's earnings report is due on Wednesday, with expectations of doubled revenue and profit. The company, led by Jensen Huang, has consistently outperformed expectations in recent quarters. Any deviation from this trend could impact not just Nvidia but the entire IT sector.

This week, the US Fed will closely watch the Personal Consumption Expenditures (PCE) index. July’s PCE is expected to rise by 2.7%.

Reliance Industries’ annual general meeting is scheduled for Thursday, where shareholders hope to gain insights into the company’s future capital investments. Meanwhile, SEBI’s recent five-year ban on Anil Ambani and 24 others from the markets caused a drop in the prices of the group's shares. Notably, Anil Ambani had already been removed from the boards of Reliance Power, Reliance Infra, and Reliance Home Finance two years ago.

In the derivatives market, GIFT Nifty closed at 24,948 on Friday night and dipped to 24,916 this morning. Indian markets are expected to open with slight gains today.

Foreign market scenario

European markets closed with strong gains on Friday, aided by the US Fed Chairman’s statement that it's time to lower rates. Despite an early 4% dip, Nestlé recovered most of its losses by the end of the day.

US markets started Friday on a high note and closed even higher, with the Dow Jones surging 462.30 points (1.14%) to close at 41,175.08. The S&P 500 gained 63.97 points (1.15%) to end at 5634.61, and the Nasdaq climbed 258.44 points (1.47%) to close at 17,877.79.

US futures are slightly up this morning, with the Dow, S&P, and Nasdaq rising by 0.03%, 0.08%, and 0.14%, respectively.

Asian markets are mixed today, with Japan’s Nikkei down 1% and South Korea’s Kospi up 0.5%.

Indian markets

Indian markets opened higher on Friday and closed with modest gains. However, selling pressure persists, with sectors like realty, IT, media, metals, banks, finance, and oil & gas all seeing declines.

On Friday, the Sensex rose by 33.02 points (0.04%) to close at 81,086.21, while the Nifty gained 11.68 points (0.05%) to end at 24,823.15. Bank Nifty fell by 0.10% (52.25 points) to close at 50,933.45.

The Mid-cap index dropped by 0.49% to 58,555.30, while the small-cap index fell by 0.11% to 19,079.25.

Foreign investors purchased shares worth ₹1,944.48 crore in the cash market on Friday, continuing their buying spree. Domestic funds and institutions bought shares worth ₹2,896.02 crore.

The market ended the week on a bullish note, with expectations that the Nifty will continue its rally to surpass 25,000. Today, the Nifty has support at 24,785 and 24,765, with resistance at 24,850 and 24,870.

Gold and crude oil climb

With clarity on interest rates, gold has surged past $2,500 and is expected to rise further this week. Many market observers believe it could break the recent record of $2,531.75. If upcoming jobs data and second-quarter GDP figures meet expectations, the market is likely to remain steady.

December gold futures climbed to $2,547 per ounce, while spot gold closed at $2,513.20. Prices rose to $2,516 this morning.

In Kerala, gold prices fell by ₹160 per sovereign on Friday to ₹53,280 but increased by ₹280 to ₹53,560 on Saturday.

Silver prices are at $29.90 per ounce.

The dollar index fell sharply on Friday, dropping 79 points to close at 100.72. It slipped further to 100.58 this morning. The dollar is expected to weaken further as US interest rates decline.

Rupee gains slightly

The rupee gained slightly on Friday, closing at ₹83.89 per dollar, up by 6 paise. It is expected to rise further this week. Other emerging market currencies are also strengthening, but the Reserve Bank’s intervention is anticipated if the rupee strengthens too much, which could harm exports.

Crude oil prices have risen again due to escalating Middle East tensions. Brent crude closed at $79.02 on Friday, up by 2.5%, and rose to $79.63 this morning. WTI crude is at $75.46, while UAE’s Murban crude is at $78.98.

With rate cuts on the horizon, industrial metals have surged. Copper rose by 1.24% to $9,173.21 per tonne, and aluminium jumped by 2.91% to $2,542.15 per tonne. Zinc, tin, lead, and nickel also saw gains of up to 1.3%.

Cryptocurrencies soared on Friday, with Bitcoin rising by 7.5% to $64,750 and Ether reaching $2,790.