India’s pre-dawn ‘Operation Sindoor’ missile strike destroyed nine terror camps in Pakistan. Though Pakistan claimed it would retaliate, nothing significant had occurred by morning. This sense of relief and confidence may buoy the markets today. However, the market's future course will depend on whether Pakistan responds, and how.
The US Federal Reserve is set to announce its monetary policy decision later tonight.
In an effort to resolve the trade war, the US and China are set to hold talks in Switzerland this week. Hopes are high for meaningful progress. US futures are already rising in response.
India has signed a free trade agreement with Britain, removing tariffs on Indian exports. The import duty on whisky from Britain will be reduced from 150 percent to 75 percent.
Despite these positive developments, worries over a broader war will continue to cast a shadow on the market.
In the derivatives market, Gift Nifty closed at 24,125 on Tuesday night. It opened at 24,261 this morning and rose to 24,383 before pulling back slightly. This indicates that Nifty may open on a softer note today.
European markets were weak yesterday. The German Chancellor Friedrich Mertz failed to win the first round of voting, dragging down the markets. Losses narrowed after he won the second round in the afternoon.
US markets were also hit on Tuesday due to a lack of resolution in the trade dispute. Futures opened lower after market close but rallied upon news of the upcoming high-level talks in Switzerland.
The US Treasury Secretary Scott Bessen and Trade Representative Jamison Greer will meet Chinese Vice Premier He Lifeng in Switzerland. Indications are that earlier back channel discussions helped reach consensus on many matters. A successful round of talks could end major economic uncertainties.
On Tuesday, the Dow Jones Index fell 389.83 points (0.95 percent) to close at 40,829.00. The S&P 500 lost 43.47 points (0.77 percent) to end at 5606.91, while the Nasdaq fell 154.58 points (0.87 percent) to 17,689.66.
US futures were higher this morning, with the Dow up 0.67 percent, S&P 0.80 percent, and Nasdaq 0.94 percent.
Asian markets are broadly positive. News of the US–China talks lifted the Hang Seng Index by 2.5 percent and the Shanghai Index by 1.5 percent. China also cut its short-term interest rate by 0.10 percent and lowered the banks’ reserve requirement by 0.5 percent. In Japan, the Nikkei Index was slightly down.
The Indian market opened higher on Tuesday but slipped into losses later, wiping out all previous gains. The session saw nervous profit-booking.
Banking and financial companies recorded heavy losses. A Supreme Court ruling, which potentially prevents companies from raising capital through certain procedural steps, weighed on the sector. Review petitions have been filed against the verdict. The public sector bank index dropped 4.84 percent. Bank of Baroda shares fell 10.99 percent.
The realty index declined 3.58 percent, with major losses in Godrej, Puravankara, Sobha and Prestige.
News that the US will announce a tariff on pharmaceutical imports within two weeks hit Indian pharma exporters.
Yes Bank shares rose following reports that Sumitomo Mitsui Banking Corporation received RBI approval to acquire the bank.
Shipbuilding companies such as Cochin Shipyard, Mazagon Dock, Garden Reach, and Shipping Corporation fell more than 4 percent.
On Tuesday, the Nifty dropped 81.55 points (0.33 percent) to close at 24,379.60. The Sensex lost 155.77 points (0.19 percent) to end at 80,641.07. The Bank Nifty declined 648.10 points (1.18 percent) to close at 54,271.40. The Mid Cap 100 Index fell 1239.90 points (2.27 percent) to 53,435.85, and the Small Cap 100 Index shed 441.75 points (2.50 percent) to 16,195.15.
The market breadth was negative. On the BSE, 742 stocks gained while 3209 declined. On the NSE, 545 advanced while 2331 fell.
On the NSE, 25 stocks hit 52-week highs while 56 touched lows. As many as 35 stocks hit the upper circuit and 122 the lower circuit.
Foreign investors were net buyers in the cash segment, picking up shares worth ₹3794.52 crore. Domestic funds sold shares worth ₹1397.68 crore.
If Nifty breaks the support at 24,300, it could fall to 24,050. Today’s support levels are at 24,340 and 24,235. Resistance is expected around 24,480 and 24,580.
Coal India, Punjab National Bank, Dabur, MRF, Wonderla Holidays, Voltas, Sonata Software, Mangalore Chemicals, Niva Bupa, Tata Chemicals and United Breweries will announce their Q4 results today.
A surprise fall in the US dollar and global developments pushed gold close to record highs once more. On Tuesday, gold rose 3 percent to close at $3434.50 per ounce. However, it dropped 2 percent this morning to $3370 following confirmation of the US–China talks.
On Monday, gold prices in Kerala jumped by ₹2000 per sovereign to ₹72,200. Prices may rise again today.
In the international market, rubber prices rose 1.59 percent to 172.40 cents per kilogram. Cocoa gained 2.40 percent to reach $8862.31, while coffee rose 0.82 percent. Palm oil declined 0.44 percent.
The dollar index, which crossed 100 on Tuesday morning, could not sustain the level and closed at 99.24. It rose to 99.52 this morning.
The euro rose to $1.1342, the pound to $1.3348, and the Japanese yen strengthened to 142.96 yen per dollar.
The rupee opened at 84.28 per dollar on Tuesday morning and weakened further during the day. It closed at 84.43, up by 18 paise from the previous session.
China’s currency appreciated to 7.22 yuan per dollar. Other Asian currencies have also risen against the dollar in recent days.
Cryptocurrencies rallied this morning. Bitcoin rose close to $97,500 and Ether traded above $1840.
