Indian stock market: 10 key things that changed for market overnight - Gift Nifty, India CPI inflation to ECB rate cut

Indian stock market: The domestic equity market indices, Sensex and Nifty 50, are expected to open higher on Friday tracking positive global market cues.

Asian markets traded mixed, while the US stock market ended higher overnight amid rising expectations of interest rate cuts by the US Federal Reserve.

Traders were still betting on a 69% chance the US central bank cuts rates by just 25 bps when it meets on September 17-18, CME’s FedWatch Tool showed. It would be the first rate cut since March 2020.s 

On Thursday, the Indian stock market witnessed a sharp rally, with both the benchmark indices, Sensex and Nifty 50, hitting fresh record highs.

The Sensex surged 1,439.55 points, or 1.77%, to close at 82,962.71, while the Nifty 50 settled 470.45 points, or 1.89%, higher at 25,388.90.

“Across the board buying support lifted both benchmark Sensex & Nifty to fresh record highs as falling US bond yields and expectations of a rate cut by the US Federal Reserve in next week’s policy meeting fuelled massive optimism. With retail money continuing to flow in despite concerns of stretched valuations in local markets, investors remain upbeat about India’s resilient economy in a slowing global economy,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Technically, Nifty closing above 25,200 is a good sign, and the next resistance is above 25,580. And by September end, there is a high possibility that Nifty can touch and trade in the range of 25,600 - 25,700 levels, he added.

Here are key global market cues for Sensex today:

Asian Markets

Asian markets traded mixed on Friday. Japan’s Nikkei 225 declined 0.43%, while the Topix fell 0.58%. South Korea’s Kospi traded flat, while the Kosdaq was marginally lower.

Hong Kong Hang Seng index futures indicated a higher opening, while futures for mainland China’s CSI 300 were slightly higher than the last close Thursday.

Gift Nifty Today

Gift Nifty was trading around 25,390 level, a premium of nearly 56 points from the Nifty futures’ previous close, indicating a positive start for the Indian stock market indices.

Wall Street

US stock market ended higher on Thursday after the latest inflation data reinforced hopes for a 25-basis point rate cut by the Federal Reserve.

The Dow Jones Industrial Average gained 235.06 points, or 0.58%, to 41,096.77, while the S&P 500 rose 41.63 points, or 0.75%, to 5,595.76. The Nasdaq Composite ended 174.15 points, or 1.00%, higher at 17,569.68.

Warner Bros Discovery shares jumped 10.4%, while Charter share price rose 3.6%. Moderna ended 12.4% lower, while Kroger shares rallied 7.2%.

US Jobless Claims

The number of Americans filing new applications for unemployment benefits increased marginally last week. Initial claims for state unemployment benefits rose 2,000 to a seasonally adjusted 230,000 for the week ended September 7. Economists polled by Reuters had forecast 230,000 claims for the latest week.

US Producer Prices

US producer prices increased slightly more than expected in August. The producer price index for final demand rose 0.2% last month. Data for July was revised lower to show the PPI being unchanged instead of edging up 0.1% as previously reported. Economists polled by Reuters had forecast the PPI gaining 0.1%. In the 12 months through August, the PPI increased 1.7% after advancing 2.1% in July.

ECB Rate Cut

The European Central Bank (ECB) lowered interest rates for the second time this year. The key deposit rate was cut by 25 basis points to 3.5%, in line with estimates. The ECB also lowered its 2024 economic growth projection but still sees inflation broadly in line with its 2% target by the end of 2025.

India Inflation, IIP Data

India’s retail inflation rose to 3.65% in August, slightly higher than 3.6% reported in July. The inflation was within the Reserve Bank of India’s (RBI) medium-term target of 2-6%.

Separately, the Index of Industrial Production (IIP) rose slightly to 4.83% in July from 4.72% in June.

Gold Rate Today

Gold prices hit a record high, helped by expectations of an interest rate cut by the Fed. Spot gold surged to a lifetime high of $2,562.66 per ounce, while US gold futures settled 1.5% higher at $2,580.60.

US Treasury Yields

US Treasury yields fell on hopes of Fed rate cut. Yields on two-year Treasury notes fell 4 basis points to 3.601%, and back toward the recent low of 3.55%, Reuters reported. Ten-year yields dropped 3 bps to 3.646%.

Crude Oil Prices

Crude oil prices extended a rally sparked by output disruptions in the US Gulf of Mexico.

Brent crude futures rose by 0.5% to $72.31 per barrel, while US West Texas Intermediate crude futures gained 0.6% to $69.35 a barrel.

(With inputs from Reuters)

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