Indian stock market: 8 key things that changed for market overnight - Gift Nifty, Jerome Powell testimony to oil prices

Indian stock market: The domestic equity market is expected to open flat on Wednesday tracking mixed cues from global peers.

Asian markets traded mostly lower, while the US stock market ended mixed overnight, with the S&P 500 and Nasdaq closing at record highs.

US Federal Reserve Chair Jerome Powell, in his testimony to US Congress, told lawmakers that more “good” economic data would strengthen the case for rate cuts. While he acknowledged progress in inflation and a cooling job market, he did not give a clear signal for cutting interest rates.

Markets have stuck to pricing in 50 basis points of easing for the year, seeing a nearly 72% chance for a 25 bps rate cut by the Fed’s September meeting, according to CME’s FedWatch.

On Tuesday, the Indian stock market benchmark indices ended higher after hitting fresh record highs led by a rally in automobile stocks.

The Sensex rose 391.26 points, or 0.49%, to close at 80,351.64, while the Nifty 50 settled 112.65 points, or 0.46%, higher at 24,433.20.

“We expect markets to trade with a positive bias and take cues from upcoming inflation data, Q1FY25 earnings, and budget. Pharma sector is likely to remain in focus over the next few days on back comfortable valuation and expectation of healthy earning growth in Q1,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Here are key global market cues for Sensex today:

Asian Markets

Asian markets traded mixed amid inflation data from China and Japan.

Japan’s Nikkei 225 eased marginally, while the Topix was flatline. South Korea’s Kospi fell 0.25%, while the Kosdaq declined 0.2%. Hong Kong Hang Seng index futures indicated a higher opening.

Gift Nifty Today

Gift Nifty was trading around 24,485 level, a premium of nearly 7 points from the Nifty futures’ previous close, indicating a flat start for the Indian stock market indices.

Wall Street

US stock market ended mixed on Tuesday with the S&P 500 and Nasdaq notching record-high closes on Tuesday.

The Dow Jones Industrial Average declined 0.13% to 39,291.97, while the S&P 500 rose 0.07% to end at 5,576.98. The Nasdaq closed 0.14% higher at 18,429.29, recording sixth straight record-high close.

Nvidia share price rallied 2.5%, Microsoft shares fell 1.4%, while Tesla stock price gained 3.7%. JPMorgan and Wells Fargo shares rose over 1% and Citi share price gained 2.8%. Tempus AI shares jumped almost 4%

Jerome Powell

The US is “no longer an overheated economy” with a job market that has “cooled considerably” from its pandemic-era extremes, Fed Chair Jerome Powell said in remarks to Congress, Reuters reported. “We are well aware that we now face two-sided risks,” and can no longer focus solely on inflation that nevertheless still “remains above” the central bank’s 2% target, Powell told the Senate Banking committee.

Japan Wholesale Inflation

Japan’s wholesale inflation accelerated in June as weak yen pushed up the cost of raw material imports. The corporate goods price index (CGPI) rose 2.9% in June from a year earlier, Bank of Japan data showed, matching a median market forecast and accelerating from the previous month's revised 2.6% gain, Reuters reported. The index increased 9.5% in June from a year earlier, accelerating from a revised 7.1% rise in May.

Dollar

The dollar rose on Wednesday after Fed Chair Powell’ cautious tone on how soon interest rate cuts would come.

The dollar index, which measures the US currency against six major peers including the euro and yen, was up 0.3% at 105.15, after rising about 0.1% on Tuesday. It fell to 104.80 on Monday, the lowest since June 13.

US Treasury Yields

US Treasury yields rose on Tuesday after Fed Chair Powell struck a less than dovish tone in his testimony before Congress.

The benchmark US 10-year Treasury note yield rose 2.5 bps to 4.293%, while the 30-year Treasury yields were up 3.1 bps at 4.489%. US three-year yields edged up to 4.402%, while the two-year US Treasury yield was flat to slightly higher at 4.622%.

Oil Prices

Crude oil prices rose on Wednesday, rebounding after three days of declines, as a report showed US crude and fuel stockpiles fell last week.

Brent futures rose 0.25% to $84.87 a barrel, after falling 1.3% in the previous session. US West Texas Intermediate (WTI) crude gained 0.32% to $81.67 a barrel, after falling 1.1% in the previous session.

(With inputs from Reuters)

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