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PremiumMarket Close Highlights : European stocks fell and bond yields rose after the latest price data from the UK cast doubt on hopes that prices pressures have been vanquished.
The Stoxx Europe 600 slipped about 0.3%, with the FTSE 100 underperforming, after data showed that UK inflation slowed less than expected last month, raising questions about when the Bank of England can start cutting interest rates. The pound strengthened and gilts plunged, sending the two-year yield about 12 basis points higher.
Bond yields across Europe rose, while 10-year US Treasury borrowing costs also ticked up.
The figures will reinforce concerns that inflation pressures globally remain sticky, preventing central banks from easing policy as soon as currently anticipated. Earlier on Wednesday, the Reserve Bank of New Zealand kept interest rates unchanged and signaled policy will stay tight for longer, while Federal Reserve Governor Christopher Waller said on Tuesday he needs to see several more good inflation numbers to begin interest-rate cuts.
“Both the RBNZ and the UK inflation data highlight the fraught nature of the current juncture, with investors struggling to gauge both the timing and extent of long-awaited central bank easing cycles," Rabobank’s head of rates strategy, Richard McGuire, said in a note.
US equity futures were little changed after the S&P 500 hit yet another record high Tuesday, with artificial intelligence bellwether Nvidia Corp. due to report its results after market close. It’s projected to report a 243% gain in revenue, according to Wall Street estimates, but a 90% year-to-date share rally means it could struggle to match sky-high expectations.
In Europe, shares in Anglo American Plc slid as investors waited to see if bigger rival BHP Group Ltd. would launch its takeover bid to create a global copper behemoth. BHP has a deadline of 5 p.m. London time to announce a firm intention to make an offer. Among other prominent stock movers, Marks & Spencer Group Plc jumped to the highest since November 2018 after issuing better-than-expected results and a robust outlook.
Energy stocks were among the losers as Brent crude futures dropped for the third straight day.
Gold, silver and copper also eased after hitting record highs, though the recent price surge for metals and grains has renewed inflation fears, with Bloomberg’s spot commodity index holding near a 16-month peak.
Traders have dialed down expectatons for Fed interest rate cuts this year, currently seeing around 40 basis points of rate cuts in 2024, versus the 50 basis-point reduction priced last week. Minutes of the last Fed policy meeting, due later Wednesday, could offer further clues on rate-setters’ thinking.
Sensex Today Live : The company reported a 38.74% YoY jump in net profit at ₹86.2 crore for the fourth quarter that ended March 31, 2024. The company’s revenue from operations increased 9.8% to ₹869.6 crore as against ₹792 crore in the corresponding period of the preceding fiscal. At the operating level, EBITDA rose 34% to ₹117.3 crore in the fourth quarter of this fiscal over ₹87.5 crore in the corresponding period in the previous fiscal.
Sensex Today Live : The company reported a 123.82% YoY jump in net profit at ₹113.7 crore for Q4FY24. The company’s revenue from operations increased 27.1% to ₹1,695.3 crore against ₹1,334 crore in the corresponding period of the preceding fiscal. At the operating level, EBITDA jumped 91.4% to ₹182 crore in the fourth quarter of this fiscal over ₹95.1 crore in the corresponding period of FY23.
Sensex Today Live : Bharat Heavy Electricals’s Q4FY24 net profit rose by 25.6% to ₹489.6 crore, and revenue from operations increased marginally by 0.4% to ₹8,260 crore. The company’s EBITDA rose by 30.6% to ₹728 crore. However, the company’s consolidated net profit for FY24 declined to ₹282.22 crore. The board recommended a final dividend of 12.50% or ₹0.25 per share.
Sensex Today Live : Gujarat State Fertilisers and Chemicals reported an 89% drop in consolidated net profit to ₹24.43 crore for Q4 of 2023-24 due to poor sales. The company’s total income fell 16.34% to ₹2,017.46 crore in the same quarter.
Sensex Today Live : "One inference that can be drawn from institutional activity this month is that there is no excessive concern regarding the much talked about election results jitters. Net institutional selling is almost nil since the FII selling of ₹37,500 crores has been neutralised by DII buying of ₹37369 crores so far this month. Also, it is important to understand that FII selling has been triggered by the outperformance of Chinese stocks which nudged FIIs to sell in expensive India and buy in cheap Hong Kong. Therefore, institutional activity does not reflect any election-related jitters. The decline in India VIX by 9% in recent days also indicates a return of stability in the market.
The market is likely to respond to the election outcome earlier than June 4th. Investors can consider buying stocks before the results. Priority can be given to largecaps which are fairly valued compared to the broader market where valuations are much higher. A possibility around the election results time is both FIIs and DIIs turning buyers lifting the largecaps and the indexes to higher levels."
--Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services,
Sensex Today Live : Indian benchmark indices opened higher on Wednesday, led by positive cues from global peers.
At opening bell, Sensex was up 90.55 points, or 0.12%, at 74,043.86 and Nifty was up 29.70 points, or 0.13%, at 22,558.75.
Sensex Today Live : Indian benchmark indices jumped at pre-open on Wednesday, tracking overnight gains on Wall Street.
Sensex was up 212.21 points, or 0.29%, at 74,165.52 and Nifty was up 47.55 points, or 0.21%, at 22,576.60 during pre-open.
Sensex Today Live : BankNifty has witnessed a gradual rise, finding resistance near the 48,200 zone, and would need a decisive breach above that level for continuation of the upward move, with support maintained at 47,400 levels as of now.
Bankex, in a similar manner, is having a sluggish movement and would need a decisive breach above the 55,200 zone to trigger a further upward move to retest the previous peak zone of 56,000 levels. On the downside, the levels near 54,300 would remain in the good support zone as of now. BankNifty would have a daily range of 47,800–48,400 levels, with Bankex support at 54,300 and resistance at 55,500 levels.
Sensex Today Live : Nifty has stabilised near the 22,500 zone in the last 2-3 sessions, with select midcap counters witnessing active participation to keep the market players active. With the overall bias maintained positive, we expect the levels near the 22,400 zone to be sustained in the coming days, and a decisive breach above 22,600 levels shall further strengthen the trend to expect for the next target of the 22,900 level.
Sensex is hovering around the 74,000 level and above the 0.618% retracement level of the recent fall, and a close above the level of 74,200 can lead the index towards the 74,500 level. The support for the day is seen at 73,500/22,400 levels, while the resistance is seen near 74,400/22,650 levels.
“Early action at GIFT Nifty suggests a volatile day as sentiment wavers after Federal Reserve officials, including Governor Christopher Waller, reiterated the need for sustained inflation decline before considering rate cuts. Anxiety prevails ahead of the FOMC minutes release. Despite record FPI outflows and rising India VIX above 21, Nifty’s outlook remains optimistic. Metal stocks, buoyed by rising copper prices due to Chinese housing market interventions, are in focus. The falling WTI crude prices at $78 per barrel add a positive note. Technically, Nifty remains bullish, aiming for all-time highs of 22,795 and beyond. Recommended trades include Nifty targets at 22,600/22,795 and Bank Nifty at 48,551/48,901. Notable stock pick: ADANI PORTS with targets at 1,401/1,425."
--Prashanth Tapse, Senior VP (Research), Mehta Equities
Sensex Today Live : Sun Pharma, Adani Ports, IREDA, Hitachi Energy, BHEL, PI Industries, are a few stocks likely to be in focus on Wednesday, May 22.
Sensex Today Live : The Indian stock market, represented by the Sensex and Nifty 50, is predicted to start cautiously on Wednesday, influenced by mixed signals from international markets. The Gift Nifty trends suggest a neutral-to-positive opening for the Indian index, trading around the 22,630 level, nearly 30 points above the previous Nifty futures close.
On Tuesday, the domestic indices ended flat, with the Nifty 50 maintaining above the 22,500 mark. The Sensex dropped by 52.63 points to 73,953.31, while the Nifty 50 rose by 27.05 points (0.12%) to 22,529.05.
The Nifty 50 displayed a bullish engulfing pattern with substantial volume on the daily chart, indicating the index’s strength. Subash Gangadharan, Senior Technical Analyst at HDFC Securities, noted that the Nifty has been consolidating between 22,400 and 22,600 levels over the past two sessions. Despite this, the near-term uptrend remains intact, as evidenced by the recent large green candles on the 15-minute chart. The 20-period moving average (MA) continues to stay above the 50-period MA, indicating that the recent positive MA crossover is still in effect. (Read the full story here.)
Sensex Today Live : The Indian stock market is anticipated to commence cautiously on Wednesday, reflecting the mixed signals from global markets. Investors are closely monitoring statements from US Federal Reserve officials to understand potential interest rate changes, which influenced the US market to close higher. Meanwhile, Asian markets exhibited varied performance.
On Tuesday, the Indian market closed nearly unchanged amidst these global uncertainties. The Sensex dropped slightly by 52.63 points (0.07%) to 73,953.31, while the Nifty 50 rose modestly by 27.05 points (0.12%) to 22,529.05.
Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd, noted that despite foreign institutional investors (FIIs) selling and high levels of India Vix, the markets have found stability. He anticipates a slow upward trend in the future. Investors are advised to keep an eye on key events this week, including UK inflation data, US Existing Home Sales figures, and minutes from the Federal Open Market Committee (FOMC) meeting. (Read the full story here.)
Sensex Today Live : Indian benchmark indices were likely to start on a positive note, tracking overnight gains on Wall street, although, Asian peers had opened lower on Wednesday.
At 8:25 am, Gift Nifty futures were trading at 22,639, more than 200 points higher than Nifty 50's lower close at 22,404.55, reiterating a positive open at Dalal street.
Wall Street ended modestly higher and U.S. Treasury yields dipped on Tuesday amid the doldrums ahead of a holiday weekend and a lack of substantial market catalysts.
All three major U.S. indexes advanced and the S&P 500 and the Nasdaq reached all-time closing highs in advance of Nvidia Corp's quarterly results and in anticipation of the release of the minutes U.S. Federal Reserve's most recent monetary policy meeting, both expected on Wednesday.
"A lot of people are just waiting for Nvidia to report," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut. "And it shouldn’t have a broad effect, but it will, it will influence on how the market trades."
"There’s been so much emphasis placed on AI, every company seems to be talking about incorporating it into their operations," Pavlik added.
Fed Governor Christopher Waller on Tuesday calmed fears of a rate hike, saying recent economic data indicates the Fed's restrictive policy is working as directed.
Atlanta Fed Chair Raphael Bostic said the central bank needs to exercise caution ahead of its first rate cut to lead to pent-up spending and send inflation "bouncing around."
Minutes from the Federal Open Markets Committee's most recent meeting are due to be released on Wednesday, and they will be parsed for clues regarding timing and extent of policy-easing this year.
"(The Fed) is willing to think about rate cuts but we’re not there yet, those are the same thoughts we took away from their last meeting," Pavlik said. "It's akin to asking your parents to take you to Disney World and they say ‘we'll think about it.’ At least they’re not saying ‘no.’"
The Dow Jones Industrial Average rose 66.22 points, or 0.17%, to 39,872.99, the S&P 500 gained 13.28 points, or 0.25%, to 5,321.41 and the Nasdaq Composite added 37.75 points, or 0.22%, to 16,832.62.
European shares ended slightly lower, easing back from record highs as investors, cautious over central bank policy, awaited economic data.
The pan-European STOXX 600 index lost 0.18% and MSCI's gauge of stocks across the globe shed 0.03%.
Emerging market stocks lost 0.79%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.91% lower, while Japan's Nikkei lost 0.31%.
U.S. Treasury yields dipped as investors awaited the Fed minutes, eager for any clues regarding the timing of rate cuts.
Benchmark 10-year notes last rose 6/32 in price to yield 4.4139%, from 4.437% late on Friday.
The 30-year bond last rose 11/32 in price to yield 4.552%, from 4.573% late on Friday.
The dollar held firm against a basket of world currencies, after investors parsed commentary of Fed officials.
The dollar index rose 0.06%, with the euro down 0.01% at $1.0854.
The Japanese yen strengthened 0.05% versus the greenback at 156.20 per dollar, while Sterling was last trading at $1.2709, up 0.04% on the day.
Cryptocurrencies climbed amid signs that the U.S. Securities and Exchange Commission may approve a spot ether exchange-traded fund.
Ethereum was last up 6.3%, while bitcoin reversed an earlier gain, inching 0.2% lower.
Oil prices dipped, extending losses as the prospect of lingering inflation and "higher for longer" interest rates raised concerns over dampening demand.
U.S. crude dropped 0.68% to settle at $79.26 per barrel and Brent settled at $82.88 per barrel, down 0.99% on the day.
Gold prices backed away from an all-time high as the greenback held its ground.
Spot gold dropped 0.1% to $2,422.58 an ounce.
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