Markets tend to rise as political concerns ease; monetary policy today

The stock markets rebounded with renewed optimism as political uncertainties dissipated. Adding to the favourable sentiment, concerns over China's slowing growth have reduced its attractiveness, benefiting the Indian stock market.

These two supportive factors, along with global market trends, are expected to help Indian markets continue their gains today. A sharp decline in crude oil prices has also boosted market enthusiasm, although lower prices for metals, especially iron ore, may dampen the performance of metal companies.

At 10 a.m. today, all eyes will be on the Reserve Bank of India's (RBI) monetary policy announcement by Governor Shaktikanta Das. The market does not anticipate a cut in the repo rate, currently at 6.5%, but the focus will be on whether the RBI adjusts its stance on liquidity. The RBI's assessment of growth and inflation will also be crucial.

Global market trends

In the derivatives market, Gift Nifty closed at 25,152 on Tuesday night and is up to 25,170 today, signalling a positive start for Indian markets.

European markets ended Tuesday with losses of around 1%. However, US markets rallied, recovering most of the previous day's losses. Tech stocks rose, and the significant drop in crude oil prices contributed to the market's upward movement. Nvidia shares jumped 4%, further bolstering sentiment.

On Tuesday, the Dow Jones Index rose by 126.13 points (0.30%) to close at 42,080.37. The S&P 500 gained 55.19 points (0.97%) to end at 5751.13, while the Nasdaq climbed 259.01 points (1.45%) to close at 18,182.92.

US futures are slightly down this morning, with the Dow dipping by 0.07%, S&P by 0.09%, and Nasdaq by 0.11%. The yield on US 10-year bonds remains steady at 4.02%.

Asian markets are showing gains today. Japan's Nikkei is up by 1.25%, while Hong Kong's Hang Seng index, which fell 9.4% yesterday, has rebounded in early trading. This drop was the largest in 16 years, following a 30% surge over three weeks. China's Shanghai Composite, which reopened after a holiday, saw an initial 10% rise yesterday but closed up 4.5%. Over the last five trading days, the index has gained 20%.

Indian markets rebound 

On Tuesday, the Indian markets experienced a strong rebound, driven by better-than-expected results for the BJP in State elections. The Sensex rose by 0.72%, while the Nifty gained 0.88%. Markets had been falling for six consecutive days before this, but bulls have now regained strength. The signal that foreign investors may reduce their interest in China further supported the Indian market. The news that China's GDP growth is expected to slow further next year also contributed to the positive sentiment.

Reliance Industries and Adani Group companies posted solid gains yesterday. All sectors, except metals, ended in positive territory, with midcap and smallcap stocks also surging. Both indices gained over 2%, recovering previous losses. Companies like Paytm, BSE, RVNL, Dixon Technologies, Balakrishna Industries, and Trent made significant gains. Trent's entry into synthetic diamond sales was well received, and Allied Digital Services soared 17% on the back of large order wins.

However, the decline in global iron ore prices saw NMDC's stock fall by 4.5%. Warnings of slower growth in China also weighed on steel and metal companies.

FIIs continue to sell

Foreign investors sold ₹5,729.60 crore worth of stocks on Tuesday, bringing their total sales to ₹44,742.58 crore in just five days this month. Domestic funds and institutions, however, bought ₹7,000.68 crore worth of shares yesterday.

On the NSE, 2,234 stocks advanced while 573 declined. On the BSE, 2,969 stocks rose, with 983 closing lower.

The Sensex closed 584.81 points (0.72%) higher at 81,634.81, while the Nifty gained 217.40 points (0.88%) to end at 25,013.15. The Bank Nifty climbed 542.10 points (1.07%) to close at 51,021.00.

The midcap index surged by 1,235.70 points or 2.16% to 58,535.90, and the smallcap index rose by 374.80 points (2.05%) to 18,617.65.

Although bulls are back in the market, selling pressure remains. Today, Nifty has support at 24,830 and 24,760, while resistance levels are seen at 25,050 and 25,115.

Gold continues to decline

Gold prices fell by 0.80% yesterday, closing at $2,622.20 per ounce. This morning, prices edged up to $2,623. The decline is largely due to expectations that interest rate cuts will proceed at a slow pace.

In Kerala, gold prices remained unchanged at ₹56,800 per sovereign yesterday, though a decrease is expected today.

Silver prices also dropped, closing at $30.68 per ounce.

Currency, oil 

The US dollar remained steady, with the dollar index closing at 102.55 on Tuesday. It fell slightly to 102.48 this morning.

The Indian rupee improved slightly, closing at ₹83.96 to the dollar, down by two paise from the record high of ₹83.98.

Crude oil prices declined yesterday. Brent crude fell by 4.6%, closing at $77.18 per barrel. This morning, it is trading at $77.51. The WTI is priced at $73.91, while UAE's Murban crude is at $77.49.

Commodities, cryptocurrency 

Cryptocurrencies remain under pressure, with Bitcoin trading below $62,200 and Ether below $2,440.

Industrial metals also saw declines following the warnings of slower Chinese growth. Copper fell by 2.26% to $9,594.77 per tonne, aluminium dropped by 3.32% to $2,569.85 per tonne, while lead, zinc, nickel, and tin fell by 2.10%, 2.24%, 2.59%, and 2.75% respectively.

Market indicators (October 8)

• Sensex 30: 81,634.81 (+0.72%)
• Nifty 50: 25,013.15 (+0.88%)
• Bank Nifty: 51,021.00 (+1.07%)
• Midcap 100: 58,535.90 (+2.16%)
• Smallcap 100: 18,617.65 (+2.05%)
• Dow Jones 30: 42,080.37 (+0.30%)
• S&P 500: 5751.13 (+0.97%)
• Nasdaq: 18,182.92 (+1.45%)
• Dollar ($): ₹83.96 (-₹0.02)
• Dollar index: 102.55 (+0.01)
• Gold (per ounce): $2,622.20 (-$20.90)
• Gold (per sovereign): ₹56,800 (₹0)
• Crude (Brent): $77.18 (-$3.96)