US worries' impact marginal on Nifty, Sensex; markets gain momentum

The turbulence in the US market had a weaker impact on Indian markets. Wednesday's trading and the current US futures indicate that recession fears are less significant. This optimism will likely spill over into the markets today, with indices attempting to set new records.

In the derivatives market, Gift Nifty closed at 25,348 on Wednesday night and rose to 25,375 this morning. This suggests a positive opening for the Indian market today.

European, US, Asian markets

European markets also fell yesterday, with major indices losing around 1%.

The US market started low but saw a strong surge in the morning, though it couldn’t maintain higher levels. Indices closed with minor losses or marginal gains.

The jobs data released yesterday supported a pessimistic outlook, showing an increase of 7,67,000 jobs in July — the lowest since January 2021. As a result, markets are now expecting the Fed to cut interest rates by 0.50% at the next meeting. However, bond prices painted a different picture, with the market slightly down.

Nvidia, a major producer of AI chips, fell 1.66% yesterday. After-hours trading saw the stock rise by half a percent. The stock, which touched $140 in June, closed at $106 yesterday, affected by an ongoing antitrust investigation against the company.

The Dow Jones index rose by 38.04 points (0.09%) to close at 40,974.97, while the S&P 500 fell by 8.86 points (0.16%) to 5520.07. The Nasdaq index dropped by 52.00 points (0.30%) to close at 17,084.30.

US futures are up slightly today, with the Dow, S&P, and Nasdaq rising by 0.04%, 0.05%, and 0.09%, respectively.

US 10-year Treasury yields rose to 3.755% but later dipped slightly.

Asian markets are mostly up today, with only Japan's Nikkei and Topix indices in the red.

Indian market scenario

Indian markets started with a sharp decline on Wednesday but recovered some losses by the close. Global turbulence did not reflect here as strongly, indicating that foreign funds no longer drive the Indian markets. Instead, domestic retail investors and funds are taking the lead, as yesterday’s market movements showed.

 The fact that the market closed higher than it opened is a sign that the bullish trend remains intact. Mid-cap and small-cap stocks saw only marginal declines. On the NSE, 1,318 stocks advanced while 1,404 declined, while the BSE saw 1,845 stocks rise and 2,117 fall.

14-day winning streak ends

The Nifty ended its 14-day winning streak yesterday. The Sensex dropped by 202.80 points (0.25%) to close at 82,352.64, and the Nifty fell by 81.10 points (0.32%) to 25,198.70. The Bank Nifty declined by 0.5% (288.85 points) to close at 51,400.25.

The mid-cap index fell by 0.13% to 59,223.70, while the small-cap index declined by 0.02% to 19,322.25.

Banking, metals, IT, auto, oil & gas, and financial sectors recorded losses yesterday, while FMCG, realty, healthcare, and pharma sectors gained.

Morgan Stanley’s report forecasting reduced profitability for Indian banks weighed heavily on public sector banks. Federal Bank shares were also hit, dropping by 3.27% to close at ₹188.25. However, some brokerages recommend a buy rating for Federal Bank, with a target price of ₹230.

Foreign investors purchased stocks worth ₹975.46 crore in the cash market on Wednesday, while domestic funds and institutions bought shares worth ₹97.35 crore.

The Nifty could head towards the 25,300–25,500 range if it holds above 25,200.

On Thursday, the Nifty index has support at 25,115 and 25,085, with resistance at 25,215 and 25,250.

Crude oil remains low

Gold saw a slight uptick, closing at $2,496.20 per ounce on Wednesday and rising to $2,498 this morning. The December holiday price rose to $2,526.30 per ounce.

In Kerala, gold prices remained unchanged at ₹53,360 per sovereign yesterday.

Silver prices rose to $28.27 per ounce.

The dollar index fell slightly yesterday, closing at 101.36, and dropped further to 101.30 this morning.

Despite the dollar index falling, the rupee failed to gain and closed at its record ₹83.97 against the dollar.

Crude oil prices remain low. Brent crude closed at $72.70 and rose to $73.12 this morning. WTI crude stood at $69.62, while UAE’s Murban crude was at $73.10.

Cryptocurrencies rebounded, with Bitcoin rising to $58,000 after dipping below $56,000. Ethereum reached $2,450.

Industrial metals slid further, with copper down 0.29% to $8,830.25 per tonne. Aluminium dropped by 0.44% to $2,396.86 per tonne. Nickel, zinc, tin, and lead also fell by 1.55%, 0.61%, 2.27%, and 0.81%, respectively.

Market indicators (September 4)