Indian Stock Market: 7 Key Things That Changed Overnight For The Market – Gift Nifty, Weak Dollar Leads To Falling Government Bond Yields

Indian Stock Market: Domestic stock market indices Sensex and Nifty 50 are likely to open subdued on Wednesday following losses in global markets.

Asian markets declined, while the US stock market took a breather after its eight-day rally, ending the night in the red as investors awaited the minutes of the US Federal Reserve’s latest meeting and Fed Chair Jerome Powell’s comments at the Jackson Hole Economic Symposium.

According to the CME’s FedWatch tool, financial markets are currently pricing in a 69.5 percent probability that the Fed funds rate will be cut by 25 basis points at the conclusion of the Federal Open Market Committee meeting in September. The chance of a significant cut of 50 basis points is 30.5 percent.

On Tuesday, Indian stock market indices closed half a percent higher each due to strong global signals.

The Sensex rose 378.18 points or 0.47% to close at 80,802.86, while the Nifty 50 was 126.20 points or 0.51% higher at 24,698.85.

“After consolidating at higher levels over the past few days, the Nifty recovered as global markets recovered and we expect this momentum to continue in the near term. The broader market is likely to continue its outperformance, helped by sector rotation. All eyes will be on the minutes of the US FOMC meeting to be released on Wednesday,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services Ltd.

Here are the key global market signals for Sensex today:

Asian markets

Asian markets declined following overnight losses on Wall Street and trade data from Japan.

Japan’s Nikkei 225 fell 0.75%, while the Topix slipped 0.54%. South Korea’s Kospi lost 0.18% and the Kosdaq lost 0.66%. Hang Seng index futures in Hong Kong pointed to a lower open.

Give Nifty as a gift today

Gift Nifty was trading at around 24,695, a discount of nearly 12 points from the previous close of Nifty futures, indicating a slightly negative start for the Indian stock market indices.

Wall-Street

The US stock market closed lower on Tuesday, ending its eight-day winning streak ahead of the Jackson Hole Economic Symposium.

The Dow Jones Industrial Average lost 61.56 points, or 0.15%, to 40,834.97, while the S&P 500 fell 11.13 points, or 0.20%, to 5,597.12. The Nasdaq Composite closed 59.83 points, or 0.33%, lower at 17,816.94.

Eli Lilly shares rose 3.1 percent, while Palo Alto Networks shares rose 7.2 percent and Boeing shares fell 4.2 percent.

Japan’s trade balance

Japan’s exports rose slightly more slowly than expected in July and shipment volumes continued to decline, data showed. Japanese exports rose 10.3 percent year-on-year in July, the eighth consecutive month of gains, less than the average market forecast of 11.4 percent.

Imports rose 16.6 percent in July from a year earlier, compared with economists’ expectations for a 14.9 percent increase, Reuters reported. The trade balance showed a deficit of 621.8 billion yen ($4.28 billion), compared with a deficit of 330.7 billion yen forecast.

Oil prices

Crude oil prices were mixed as estimates pointed to rising crude oil inventories in the US.

Brent crude futures rose 0.10% to $77.28 a barrel, while U.S. West Texas Intermediate crude fell 0.44% to $74.04 a barrel.

dollar

The US dollar hit a new seven-month low on Tuesday ahead of Federal Reserve Chairman Jerome Powell’s comments on Friday. The dollar index, which measures the US currency against six rivals, was last at 101.82, having previously hit its lowest level since January 2 (101.76).

Yields on US Treasury bonds

U.S. Treasury yields fell on the prospect of a rate cut next month, with the yield on the benchmark 10-year note falling 4.9 basis points to 3.818%. It has fallen nearly 28.7 basis points so far this month, putting it on track for its biggest monthly decline since December, Reuters reported.

The yield on 30-year US Treasury notes fell to a two-week low of 4.054% and was last down 4.7 basis points at 4.068%. The yield on two-year notes fell 7 basis points to 3.998%.

(With contributions from Reuters)

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