Indian markets diverge as global indices soar; bulls remain hopeful

Indian market diverges as global indices soar; bulls remain hopeful

On thursday, the Indian markets closed without significant gains, diverging from the strong rallies witnessed in Asia, Europe, and later the US. While other markets surged following US Fed's interest rate cut, the Indian indices recorded only modest gains, with broader markets dipping sharply. However, bulls remain optimistic about a decisive rally in the near term.

Foreign funds, critical of the high valuations in Indian stocks, have been shifting their capital to markets like Brazil and the Philippines. This shift is one reason the recent rate cut announcement failed to trigger substantial market movement.

In the derivatives market, Gift Nifty closed at 25,560 on Thursday night and slipped to 25,528 by Friday morning. This indicates that Indian markets may open with modest gains today.

Global market sentiment

European markets posted solid gains on Thursday. The Bank of England maintained its interest rates. Markets are expecting another rate cut in November. The US Fed’s rate cut decision was largely seen as appropriate by investors.

After the Fed cut interest rates by half a percent, US markets surged strongly. The Dow Jones closed above 42,000 for the first time, while the S&P 500 ended above 5,700 for the first time as well.

Jobless claims data in the US supported market sentiment, with 2,19,000 people applying for benefits last week, a figure lower than both the previous week and market expectations.

Tech stocks soared yesterday, with Nvidia gaining 4%, AMD up 6%, and Meta Platforms rising 3.9%.

The Dow Jones rose 522.09 points (1.26%) to close at 42,025.19, while the S&P 500 climbed 95.38 points (1.70%) to finish at 5,713.64. The Nasdaq surged 440.68 points (2.51%) to close at 18,013.98.

US futures showed mixed trends this morning. The Dow was up 0.07%, while the S&P 500 rose 0.19% and the Nasdaq fell 0.22%.

In post-market trading, FedEx shares dropped 11% after the company lowered its annual revenue forecast. Meanwhile, Nike shares surged 9% following the announcement that CEO John Donahoe would step down in October, with Elliott Hill taking over as CEO.

US 10-year Treasury yields climbed, offering a 3.711% return.

Asian markets continued their rally today, with Japan’s Nikkei rising by 2%.

Indian markets' performance

In contrast, Indian markets opened higher on Thursday but succumbed to selling pressure, ending with marginal gains. Both the Nifty and Sensex hit record highs during the session, with the Sensex reaching 83,773.61 and the Nifty touching 25,611.95. The Sensex closed at a record high.

On the NSE, 908 stocks advanced while 1,885 declined. On the BSE, 1,255 stocks rose and 2,722 fell.

The Sensex closed 236.57 points (0.29%) higher at 83,184.80, while the Nifty gained 38.30 points (0.15%) to close at 25,415.80. The Bank Nifty rose 0.54% (287.20 points) to close at 53,037.60.

The midcap index fell 0.67% to 59,351.90, and the smallcap index dropped 1.26% to 19,144.85.

Foreign investors sold ₹2,547.53 crore worth of equities in the cash market on Thursday, while domestic institutions bought ₹2,012.86 crore worth of shares.

Sectors such as oil & gas, media, metal, pharma, and IT declined, while realty, auto, banking, and financial services rose.

FMCG stocks posted strong gains yesterday, with Spencer's Retail surging 11%. Retail stocks also performed well.

Vodafone Idea shares down by 20%

Vodafone Idea shares fell 20% after the Supreme Court rejected the company’s plea for adjustments on its AGR dues, leaving the company with a liability of ₹70,000 crore. Indus Towers dropped 9%.

Bajaj Housing Finance fell 9% over two days, with a 7.5% drop yesterday.

Public-sector firms like Oil India, GAIL, HAL, BEL, and Bharat Dynamics also declined yesterday.

Despite profit-taking, the overall market sentiment remains bullish.

For today, the Nifty has support at 25,375 and 25,325, with resistance at 25,560 and 25,615.

Gold rises

After fluctuating following the rate cut announcement, gold surged again yesterday, closing at $2,586.10 per ounce. It was trading at $2,587 this morning, with December futures priced at $2,615 per ounce.

In Kerala, gold prices fell by ₹200 per sovereign yesterday, reaching ₹54,600. Prices are expected to rise today.

Silver prices climbed to $30.85 per ounce.

The dollar index saw significant movement on Thursday, closing at 100.61, before easing to 100.59 this morning. Despite the dollar’s volatility, the Indian rupee strengthened yesterday, with the dollar closing at ₹83.68, down by 7 paise.

Crude oil prices rose yesterday, with Brent crude closing 2.5% higher at $74.88 per barrel. It fell slightly to $74.60 this morning. WTI crude was at $72.01, while UAE’s Murban crude stood at $74.64.

Cryptocurrency and metals

Cryptocurrencies gained, with Bitcoin rising to $63,000. Ether, however, slipped to $2,360.

Industrial metals also posted gains. Copper rose by 1.32% to $9,388.05 per tonne. Aluminium climbed 0.11% to $2,539.25 per tonne. Nickel, zinc, lead, and tin rose by 0.82%, 0.10%, 0.76%, and 0.99%, respectively.

Market indicators (as of September 19)

• Sensex: 83,184.80 (+0.29%)
• Nifty: 25,415.80 (+0.15%)
• Bank Nifty: 53,037.05 (+0.54%)
• Midcap 100: 59,351.90 (-0.67%)
• Smallcap 100: 19,144.85 (-1.26%)
• Dow Jones: 42,025.19 (+1.26%)
• S&P 500: 5,713.64 (+1.70%)
• Nasdaq: 18,013.98 (+2.51%)
• Dollar: ₹83.68 (-₹0.07)
• Dollar index: 100.61 (+0.01)
• Gold (per ounce): $2,586.10 (+$26.90)
• Gold (per sovereign): ₹54,600 (-₹200)
• Brent crude oil:  $74.88 (+$2.08)