Indian Stock Market: 8 Major Things That Changed Overnight For The Market – Gift Nifty, India’s Inflation To Reshuffle MSCI Index

Indian Stock Market: Domestic equity market indices are expected to open subdued on Tuesday amid mixed signals from global markets.

Asian markets were mostly higher, while the US stock market closed mixed overnight as investors await key economic data this week, particularly consumer prices, to gauge the outlook for the US Federal Reserve’s monetary policy.

Money markets are evenly betting on a 25 to 50 basis point cut in US interest rates in September and expect a total cut of 100 basis points by the end of 2024, according to the CME’s FedWatch tool.

On the domestic front, Indian traders will react to the latest retail inflation and factory production data. In addition, there may be stock-specific action due to the MSCI index rebalance in August.

On Monday, India’s benchmark indices Sensex and Nifty 50 closed marginally lower on cautious sentiment following the publication of the Hindenburg report against Sebi chief Madhabi Puri Buch in the Adani Group case.

The Sensex fell 56.99 points or 0.07% to close at 79,648.92, while the Nifty 50 closed 20.50 points or 0.08% lower at 24,347.00.

“The Indian market closed relatively flat with its initial move overshadowed by the continuation of the Adani-Hindenburg-SEBI saga. However, the market tried to brush off these noises and picked up positive cues from global markets. Moreover, the domestic market is expecting an easing in consumer price inflation, further supported by a good monsoon. Nevertheless, upside risk remains given firm oil prices and volatility in food inflation,” said Vinod Nair, Head of Research at Geojit Financial Services.

Here are the key global market signals for Sensex today:

Asian markets

Led by Japanese stocks, Asian markets recorded mostly higher prices on Tuesday.

Japan’s Nikkei 225 rose 2.53 percent, breaking above 36,000 for the first time since August 2, while the Topix index gained 2.16 percent. South Korea’s Kospi fell 0.2 percent, while the Kosdaq slipped 1.57 percent. Futures on Hong Kong’s Hang Seng index pointed to a higher opening.

Give Nifty as a gift today

Gift Nifty was trading at around 24,335, a discount of nearly 25 points from the previous close of Nifty futures, indicating a flat to negative start for Indian stock market indices.

Wall-Street

The US stock market closed mixed on Monday ahead of the release of this week’s latest economic data.

The Dow Jones Industrial Average fell 140.53 points, or 0.36%, to 39,357.01, while the S&P 500 rose 0.23 points to 5,344.39. The Nasdaq Composite closed 35.31 points, or 0.21%, higher at 16,780.61.

Starbucks shares rose 2.58%, KeyCorp shares jumped 9.1%, while Hawaiian Electric shares fell 14.45%.

Reorganization of the MSCI index

A total of seven stocks, including Vodafone Idea and Rail Vikas Nigam Ltd. (RVNL), will be included in the MSCI India Index, which is part of the MSCI Global Standard Index, in the August restructuring. Bandhan Bank will be excluded from the index.

Inflation and IIP data for India

Retail inflation in India fell to a 59-month low of 3.5% year-on-year in July, benefiting from a high base effect, according to government data. The inflation rate has fallen below the Reserve Bank of India’s (RBI) medium-term target of 4% for the first time in nearly five years.

India’s factory output growth, as measured by the Index of Industrial Production (IIP), rose 4.2% year-on-year in June, up from 6.2% in May. In June 2023, the IIP had grown by 4.0%.

Japanese producer inflation

Inflation, measured by Japan’s producer prices, rose for the sixth month in a row in July. Input prices for Japanese companies rose 3.0 percent year-on-year, the BOJ reported. The increase exceeded economists’ expectations of a 3.1 percent increase. Compared to the previous month, prices rose 0.3 percent, in line with the consensus estimate.

Oil prices

Crude oil prices fell, ending a five-day upward streak.

Global benchmark Brent crude futures fell 0.5% to $81.89 a barrel, while U.S. West Texas Intermediate crude futures fell 0.5% to $79.63 a barrel. Brent had gained more than 3% on Monday, while U.S. crude futures rose more than 4%.

Foreign exchange market

The dollar was on the sidelines as a rally in Japanese stocks helped pare losses in yen carry trades. The greenback languished at 147.17 yen after briefly hitting a one-week high of 148.23 overnight before profit-taking, Reuters reported. The euro was at 1.0931 dollars, while the dollar index was unchanged at 103.08.

(With contributions from Reuters)

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