Indian equity markets are likely to start the day on a strong footing on December 12 due to good global opening cues and a strong rally in US stocks following the rate cut announced by the Federal Reserve. The Indian market staged a recovery on Thursday after three days of weakness. The auto and IT stocks led the recovery.
Strong Global Setup for Indian Equities
Both Sensex and Nifty 50 are set to open on a higher note today, following the overall positive sentiments prevailing across global markets. Last night, Dow Jones and S&P 500 marked new records as the US Fed reduced interest rates by 25 basis points and hinted at a subsequent cut next year. All these positives influenced Asian markets as well, and they were trading positively today morning.
Gift Nifty Shows Promising Opening
Also following
Nifty Gift continued with a strong trend, ranging around its record high price at 26,134, with a gain of 108 points or 0.4 percent higher compared with yesterday’s close.
Domestic Market Rebounds After Fed Cut
Reuters surveyed 17
Back home, Indian markets ended their losing streak on Thursday.
Sensex: up 427 points (0.51%) at
Nifty 50: rose 141 points or 0.55%, at
The rate cut by the Fed, and subsequent lowering of bond yields for 10-year US bonds, eased worries about foreign outflows. Auto stocks were on an uptrend on account of better demand, and IT stocks rose as they were driven by anticipation of rising global expenditure on technology.
Vinod Nair, Head of Research at Geojit Financial Services, said that “the market’s recovery has been driven by the Fed’s policy decision and a resultant softening of bond yields.” According to Nair, “auto and IT were better, but worries about AI valuations and rising bond yields in Japan impacted Asia.”
Important Market Triggers Today
1. Asian Markets
Australia's index had almost a 1% gain
S&P 500 futures were unchanged, and Nasdaq 100 futures were slightly lower (-0.1%).
The rally also caused the MSCI All Country World Index to record a new high, thus setting a stage for it to have one of its best years since 2019.
2. Gift Nifty
Overall, Gift Nifty also continues to flash market strength and is currently at record levels at 26,134, an increase of 108 points from the previous close.
3. Wall Street Performance
US markets again rose as the Fed cuts rates:
Dow Jones: +646.26 points(1.34%) to
S&P 500: +14.32 points (0.21
Nasdaq Composite: -60.3 (-0.25%) to
The Nasdaq fell as tech stocks were hurt by soft guidance from Oracle, but financials led with a gain of 1.8%, and materials were up 2.2%.
4. Expectations Regarding Policies at the Bank of Japan
The Bank of Japan is set to increase its interest rate to 0.75% next week, its first tightenings since January. All 50 surveyed economists forecast an increase, making it the first unanimous forecast under Governor Ueda.
5. US Trade Deficit
Trade statistics from the US for September showed that its trade gap had decreased by 10.9% and stood at $52.8 billion, its lowest position since 2020. Its exports rose by 3%, but imports rose just 0.6%, which could be attributed to President Trump’s tariffs.
6. Trump-Mod
A telephonic conversation took place between Prime Minister Narendra Modi and U.S. President Donald Trump. During this call, they discussed strengthening strategic and economic cooperation. Both leaders were reminded to speed up efforts put forth on strengthening trade cooperation and, more so, on a possible trade agreement.
7. US Dollar Weakness
The US dollar began declining and fell to multi-month lows against major currencies:
Euro: +0.4% to
Swiss Franc: Dollar falls 0.6%, weakest level since mid-November
Yen: Dollar down at 155.61
The US Treasury bond yields again dropped for the second consecutive day following Fed policy decisions.
8. Gold and Silver Prices
Gold prices eased somewhat after reaching a seven-week high:
Spot Gold: -0.2% at $4,
US Gold Futures: down 0.1% at $4,
Silver: down 0.5% at $63.31/oz after posting a record high
Silver continues to be one of its biggest winners so far this year, as it continues to gain 119% so far.
9. Oil Prices
Oil rallied after its sharp decline:
WTI: near $58
Brent Above $61/b
Despite a recovery, oil prices are down almost 20% so far this year as forecasters predict a big global supply surplus. The IEA pointed out that oil stocks have reached a level Continue reading → Disclaimer The article ahead is meant for educational purposes. Opinions contained within this article belong to market experts and research houses but not ICFM. It is imperative for an investor to seek advice from financial experts before making any investment.
