Asian markets started Wednesday on a cautious note, weighed down by South Korea’s political instability following its president's temporary declaration and subsequent retraction of martial law. The KOSPI index dropped 2%, while the Korean won also weakened. Japan's Nikkei slid by 0.25%, and Australia’s benchmark declined by 0.5%.
In China, indices opened lower amid lingering concerns over a slowing economy. These developments set the tone for a tentative trading session across the region.
Indian markets look optimistic
Contrary to the regional trend, Indian markets are poised for a subdued yet hopeful start. The Nifty is projected to open marginally lower, as indicated by derivative cues, but expectations of sustained foreign buying and a bullish momentum over the past three sessions buoy investor confidence.
Tuesday saw the Sensex climb 578.66 points (+0.72%) to close at 80,826.74, while the Nifty gained 181.10 points (+0.75%) to end at 24,451.15. Notably, the midcap and smallcap indices outperformed, rising by 0.89% and 0.84%, respectively, underscoring broader market participation.
Foreign institutional investors (FIIs) remained net buyers, acquiring ₹3,664.67 crore worth of equities on Tuesday, providing a strong support base for the rally. Domestic institutions, however, net sold ₹250.99 crore worth of shares.
RBI policy in focus
The Reserve Bank of India’s Monetary Policy Committee commences its three-day meeting today, with Governor Shaktikanta Das set to announce its decision at 10 a.m. on Friday. Analysts expect the RBI to hold the repo rate steady amidst persistent inflation concerns, instead potentially introducing measures to ease credit access for businesses.
US, European markets
Wall Street closed mixed on Tuesday, with the Dow Jones slipping 0.17%, while the S&P 500 edged up 0.05% and the Nasdaq climbed 0.4%. Strong US job openings data for October, exceeding estimates at 7.74 million, hinted at labour market resilience ahead of Friday's payroll report.
On the corporate front, Tesla shares dipped 2% following a court ruling against Elon Musk’s bid to reinstate a $5.6 billion pay package. Meanwhile, Nippon Steel’s blocked acquisition of US Steel dragged the latter’s stock down by 8%.
European indices closed higher for the third consecutive day, though political turmoil in France looms large. Parliament's approval of a budget without a vote has paved the way for a no-confidence motion, potentially forcing President Macron to appoint a new prime minister.
Commodities and currencies
Gold prices edged lower in early Wednesday trading, hovering at $2,640 per ounce after a modest $2.40 gain in the previous session. Silver followed suit, settling at $30.95/oz.
Crude oil prices surged by over 2% on anticipation of OPEC production cuts, with Brent crude trading at $73.65/bbl.
In currency markets, the Indian rupee ended Tuesday slightly stronger at ₹84.69 to the US dollar, supported by Reserve Bank intervention. However, the dollar index rose to 106.47 in early trade, indicating broader greenback strength.
Technical view
Technical analysts highlight immediate support for the Nifty at 24,330 and 24,285, with resistance zones at 24,485 and 24,530. While the index has breached the 24,350 level, further upward movement may face hurdles in the 24,550–24,800 range.
As global markets remain under pressure from geopolitical and economic uncertainties, Indian equities are navigating these challenges with a mix of cautious optimism and sustained buying interest. Investors will keep a sharp eye on the RBI policy announcement and key global developments, including US payroll data and OPEC's decision on crude oil production.
