Indian stock market: 7 key things that changed for market overnight - Gift Nifty, weak dollar to fall in Treasury yields

Indian stock market: The domestic equity market indices, Sensex and Nifty 50, are expected to open on a muted note on Wednesday tracking losses in global markets.

Asian markets traded lower, while the US stock market took a breather from its eight-day rally and ended in the red overnight as investors awaited the minutes of the US Federal Reserve’s last meeting and the comments from Fed Chair Jerome Powell at the Jackson Hole Economic Symposium.

Financial markets are currently pricing in a 69.5% likelihood of a 25 basis-point reduction of the Fed funds target rate at the conclusion of the Federal Open Market Committee meeting in September, with a 30.5% chance of a super-sized cut of 50 basis points, according to CME’s FedWatch tool.

On Tuesday, the Indian stock market indices ended half a percent higher each led by strong global cues.

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

“After consolidating at higher levels over the last few days, the Nifty saw recovery amidst global markets recovery and we expect this momentum to continue in the near term. Broader market is expected to continue its outperformance supported by sectorial rotation. All eyes will be on the US FOMC meeting minutes which will be released on Wednesday,” 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 lower following overnight losses on Wall Street and trade data from Japan.

Japan’s Nikkei 225 fell 0.75%, while the Topix declined 0.54%. South Korea’s Kospi eased 0.18%, and the Kosdaq dropped 0.66%. Hong Kong’s Hang Seng index futures indicated a lower opening.

Gift Nifty Today

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

Wall Street

US stock market ended lower on Tuesday, breaking their eight-day winning streak ahead of the Jackson Hole Economic Symposium.

The Dow Jones Industrial Average eased 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 ended 59.83 points, or 0.33%, lower at 17,816.94.

Eli Lilly shares gained 3.1%, while Palo Alto Networks stock price jumped 7.2% and Boeing shares dropped 4.2%.

Japan Trade Balance

Japan’s exports rose at a slightly slower pace than expected in July and shipment volumes extended their declines, data showed. Japanese exports rose 10.3% year-on-year in July, up for an eighth straight month, less than a median market forecast for an 11.4% increase.

Imports grew 16.6% in July from a year earlier versus a 14.9% increase expected by economists, Reuters reported. The trade balance stood at a deficit of 621.8 billion yen ($4.28 billion), compared with a forecast deficit of 330.7 billion yen.

Oil Prices

Crude oil prices traded mixed as estimates showed swelling US crude inventories.

Brent crude futures rose 0.10% to $77.28 a barrel, while US West Texas Intermediate crude declined 0.44% to $74.04 per barrel.

Dollar

US dollar hit a fresh seven-month low on Tuesday ahead of comments from Federal Reserve Chair Jerome Powell due on Friday. The dollar index, which measures the US currency against six rivals, was last at 101.82 after touching its lowest since January 2 of 101.76 earlier.

US Treasury Yields

US Treasury yields sank on prospects of an interest rate cut next month. The benchmark 10-year yield fell 4.9 bps to 3.818%. So far this month, it has dropped nearly 28.7 bps, on track for its biggest monthly decline since December, Reuters reported.

US 30-year yields fell to a two-week low of 4.054%, and were last down 4.7 bps at 4.068%. The two-year yield sank 7 bps to 3.998%.

(With inputs from Reuters)

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