Global markets shrugged off concerns about the US credit rating and moved higher on Monday. The uptrend is expected to continue today as well. Although the dollar weakened slightly, it did not experience any significant fall. Meanwhile, China cut its benchmark lending rate by 0.1 percentage point.
In the derivatives market in India, Gift Nifty closed at 25,102.50 on Monday night, slipping to 25,080 this morning — indicating a firm start for the Indian market.
The Indian market was highly volatile on Monday. After a mildly positive start and multiple recoveries, benchmark indices fell due to profit booking. The IT sector witnessed the steepest losses, with frontline IT stocks dropping as much as 2 percent.
Defence stocks made strong early gains but fell later under selling pressure. Brokerages warned that the high profit margins seen in Q4 results of defence companies may not be sustainable, and their high price-to-earnings ratios could also pose risks.
The Nifty declined by 74.35 points (0.30 percent) to close at 24,945.45, while the Sensex lost 271.17 points (0.33 percent) to finish at 82,059.42. Bank Nifty rose 81.10 points (0.15 percent) to end at 55,436. Midcap 100 gained 41.35 points (0.07 percent) to reach 57,101.85, and Smallcap 100 added 89.65 points (0.51 percent) to close at 17,650.05.
The broader market maintained a positive advance-decline ratio. On the BSE, 2,492 stocks advanced while 1,616 declined. On the NSE, 1,842 stocks rose and 1,074 fell.
On the NSE, 67 stocks hit 52-week highs while 19 reached new lows. As many as 175 stocks hit upper circuits and 54 hit lower circuits.
Foreign institutional investors (FIIs) sold shares worth ₹525.95 crore in the cash segment on Monday, while domestic institutions offloaded ₹237.93 crore worth of equities.
The Nifty must move out of the 24,800–25,200 range to signal a clear direction. A breakout above 25,200 could pave the way to the 25,500–25,700 region. Support is expected at 24,915 and 24,880, while resistance may be faced at 25,030 and 25,120.
European markets ended mixed on Monday. The French index saw only a marginal dip. The British pound strengthened as the UK initiated talks to rejoin aspects of the European Union.
US markets ended Monday with marginal gains. Moody’s downgrade of the US credit rating initially dented sentiment, but equities later recovered. However, the bond market reacted more strongly, with yields on 10-year Treasuries climbing to 4.5 percent.
The Dow Jones Industrial Average rose 137.33 points (0.32 percent) to close at 42,792.07. The S&P 500 added 5.22 points (0.09 percent) to finish at 5,963.60, while the Nasdaq gained 4.36 points (0.02 percent) to end at 19,215.46.
US futures edged lower this morning: Dow down 0.04 percent, S&P 0.17 percent, and Nasdaq 0.28 percent.
Jamie Dimon, CEO of JPMorgan Chase, expressed unease about the stock market’s rally, warning that investors are ignoring key risks such as the growing US national debt, inflation due to fiscal deficits, and geopolitical tensions. He cautioned that this could ultimately lead to a sharp correction. Dimon also pointed to the growing threat of stagflation — rising prices with slowing growth — and said that S&P 500 corporate earnings growth could drop to zero over the next six months.
Asian markets saw strong gains today. Japan’s Nikkei index rose by 1 percent. China’s rate cut — the first in seven months — also boosted sentiment. Markets in South Korea, Hong Kong, and Shanghai opened higher as well.
Gold prices did not surge dramatically despite the US credit downgrade being downplayed by markets. Gold rose by $26.80 to close at $3,230.50 per ounce on Monday. However, it fell to $3,219 this morning before rebounding to $3,230.
In Kerala, the price of gold rose by ₹280 per sovereign to ₹70,040.
Silver is trading at $32.30 per ounce.
In international markets, rubber rose 0.23 percent to 172.80 cents/kg. Cocoa dropped 0.24 percent to $10,905.65, while coffee gained 0.09 percent and palm oil rose 0.80 percent.
The dollar index slipped on Monday, closing at 100.43 and falling further to 100.40 this morning.
The euro strengthened to $1.1243 and the pound rose to $1.3367. The Japanese yen climbed to 144.83 per dollar.
US Treasury prices edged up slightly today. The yield on 10-year Treasuries fell to 4.441 percent.
The rupee opened strong on Friday but weakened to 85.61 against the dollar before settling at 85.40 — down by 11 paise.
China’s yuan remains steady at 7.21 per US dollar.
Crude oil saw modest gains on Monday. Brent crude closed at $65.54 per barrel. This morning, Brent is trading at $65.70, WTI at $62.85, and Murban crude at $64.98.
Cryptocurrencies remain firm. Bitcoin rose to as high as $106,000 today, while Ether reached $2,530.
