Indian stock market: 10 key things that changed for market over weekend – Gift Nifty, China PMI to US inflation data

Indian stock market: The domestic equity market indices, Sensex and Nifty 50, are expected to open lower on Monday following weakness in Asian peers amid mixed global cues.

Asian markets traded lower, while the US stock market ended mixed last week with Wall Street’s three main indexes posting weekly gains.

A subdued US inflation report stoked hopes for more US Federal Reserve rate cuts. Investors now slightly favor a 50-basis-point cut at the Fed’s next meeting with a 56.7% chance, up from 49.9% before the data, as per the CME Group’s FedWatch Tool.

On Friday, the Indian stock market indices ended lower amid profit booking after reaching record high levels.

The Sensex declined 264.27 points, or 0.31%, to close at 85,571.85, while the Nifty 50 settled 37.10 points, or 0.14%, lower at 26,178.95.

“A visible trend is that this rally was predominantly led by large-cap stocks, which are relatively fairly valued compared to mid and small caps, which are showing signs of exhaustion. A risk to the rally is elevated valuations. Given the stimulus and attractive valuations like China, FII are inclined to eastern Asian peers. Looking ahead, investors will be focusing on the Q2 earnings, with an anticipation of an improvement in earnings outlook,” said Vinod Nair, Head of Research, Geojit Financial Services.

Investors will now closely monitor key stock market triggers such as domestic and global macroeconomic data, auto sales data, second-quarter corporate updates, Sebi board meeting, IPOs, flows of foreign funds, trends in crude oil prices, and other global market cues.

Here are key global market cues for Sensex today:

Asian Markets

Asian markets traded lower on Monday led by steep fall in Japanese stocks.

Japan’s Nikkei 225 plunged over 4%, while the Topix declined 3.13%. South Korea’s Kospi dropped 0.54%, and the Kosdaq fell 0.49%. Hong Kong’s Hang Seng index futures indicated a lower opening.

Gift Nifty Today

Gift Nifty was trading around 26,315 level, a discount of nearly 30 points from the Nifty futures’ previous close, indicating a weak start for the Indian stock market indices.

Wall Street

US stock market ended mixed on Friday, with the blue-chip Dow Jones index closing at a record high.

The Dow Jones Industrial Average rallied 137.89 points, or 0.33%, to 42,313.00, while the S&P 500 lost 7.20 points, or 0.13%, to 5,738.17. The Nasdaq Composite ended 70.70 points, or 0.39%, lower at 18,119.59.

Nvidia stock price fell 2.17%, Bristol-Myers Squibb shares rose 1.58%, while Costco Wholesale stock declined 1.76%. US-listed shares of Chinese firms such as Alibaba rose 2.15%, PDD Holdings rallied 4.67% and NetEase gained 2.65%.

US Inflation

The Federal Reserve’s preferred inflation measure provided the latest sign that price pressures are easing. The personal consumption expenditures (PCE) price index rose 0.1% in August after an unrevised 0.2% gain in July. Economists had forecast PCE inflation advancing 0.1%. In the 12 months through August, the PCE price index increased 2.2% after rising 2.5% in July.

US Consumer Spending

US consumer spending increased moderately in August. Consumer spending rose 0.2% last month after an unrevised 0.5% gain in July. Economists polled by Reuters had forecast consumer spending climbing 0.3%.

China PMI

China’s factory activity contracted for a fifth consecutive month in September. The official manufacturing purchasing managers’ index came in at 49.8 in September as against 49.1 in August.

China Stimulus

China’s central bank said it would tell banks to lower mortgage rates for existing home loans before October 31. Commercial banks should, in batches, reduce interest rates on existing mortgages to no less than 30 basis points (bps) below the Loan Prime Rate (LPR), the central bank’s benchmark rate for mortgages, according to a statement released by the People’s Bank of China (PBOC). It is expected to cut existing mortgage rates by about 50 bps on average.

Middle East

The Israeli Air Force (IAF) launched airstrikes on military targets in Yemen, specifically targeting Houthi-controlled sites. On Friday, Israel killed Hezbollah leader Hassan Nasrallah in precision strikes on Lebanon’s capital Beirut, escalating tensions in the Middle East.

Dollar, Treasury Yields

US dollar and Treasury yields dropped after the subdued US inflation report. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was down 0.17% at 100.43 after falling to 100.15, its lowest since July 20, 2023. The Japanese yen fell 0.29% against the dollar to trade at 142.63. The yield on benchmark US 10-year notes fell 3.5 basis points to 3.754%

Oil Prices

Crude oil prices rose after escalating tensions in the Middle East.

Brent crude oil rose 0.81% to $72.56 a barrel, while the US West Texas Intermediate (WTI) crude futures gained 0.78% to $68.71.

(With inputs from Reuters)

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