Expectations of a breakthrough in US-EU trade talks have fuelled a rally in global markets, but Indian equities remain subdued amid IPO-related selling pressure and weak foreign institutional investor activity.
Markets across Europe and the US surged on Wednesday, buoyed by hopes of a resolution in the ongoing trade tensions between the United States and the European Union. Asian indices also opened in the green on Thursday, continuing the momentum.
The DAX index in Germany hit a record close at 24,226.49, while US indices posted strong gains after President Donald Trump indicated readiness for negotiations with the EU. The US consumer confidence data came in stronger than expected, further boosting sentiment.
The Dow Jones Industrial Average rose 740.58 points (1.78%) to close at 42,343.65, while the S&P 100 surged 118.72 points (2.05%) to finish at 5,921.54. The Nasdaq Composite jumped 461.96 points (2.47%) to end at 19,199.16. US futures were marginally higher in early Thursday trade.
Asian markets followed suit, with major indices in Japan and South Korea opening higher.
In contrast, the Indian stock market is expected to have a weak opening on Thursday following a surprise dip on Wednesday. Profit-taking by large funds, triggered by concerns over stretched valuations and uncertainties around trade deals, led to broad-based selling.
The Nifty declined by 174.95 points (0.70%) to close at 24,826.20, while the Sensex lost 624.82 points (0.76%) to end at 81,551.63. The Bank Nifty fell 219.20 points (0.39%) to 55,352.80. However, mid cap and small cap indices showed resilience, with the Nifty Midcap 100 rising 87.25 points (0.15%) to 57,154.50 and the Nifty Smallcap 100 gaining 17.35 points (0.10%) to 17,725.15.
The advance-decline ratio favoured decliners, with 2,053 stocks falling and 1,897 advancing on the BSE. On the NSE, 1,462 shares declined against 1,412 advancing.
Notably, 42 stocks on the NSE touched their 52-week highs, while 13 hit their 52-week lows. There were 101 stocks hitting upper circuits and 51 hitting lower circuits.
Foreign institutional investors (FIIs) were net sellers in the cash market to the tune of ₹348.45 crore, while domestic institutional investors (DIIs) bought shares worth ₹10,104.66 crore.
The Gift Nifty closed at 24,869 on Wednesday night and traded around 24,885 in early Thursday deals, suggesting a modestly positive start.
Support for the Nifty is seen at 24,725 and 24,640, while resistance is expected at 25,000 and 25,090. If 24,700 holds, an upward move towards 25,000 may continue. A breach below could drag the index to 24,450–24,500.
Gold prices continue to fluctuate due to dollar volatility. On Wednesday, gold fell by $32 to close at $3,302 per ounce, before recovering to $3,315 in early Thursday trade. In Kerala, the price of gold dropped ₹120 per sovereign to ₹71,480 after some intraday volatility.
In the global rubber market, prices rose 0.77% to 170.50 cents per kg. Cocoa slipped 0.95% to $9,770.87 per tonne.
The dollar index edged higher on optimism surrounding the US-EU trade deal, closing at 99.52 on Monday and rising further to 99.64 on Thursday morning. The euro slipped to 1.1332 against the dollar, while the pound stood at 1.351. The Japanese yen weakened to 144.26 per dollar. The US 10-year Treasury yield dropped to 4.469%.
The Indian rupee weakened by 24 paise on Monday to close at 85.33 against the dollar. The Chinese yuan remained steady at 7.20 per dollar.
Bitcoin remained volatile, trading below $109,000, while Ethereum hovered near $2,650.
