Indian Equity Market: The domestic equity market is expected to open higher and benchmark indices Sensex and Nifty 50 are likely to continue their gains on positive momentum from global markets.
Asian markets rose, while U.S. stocks ended last week higher on growing hopes that the Federal Reserve will soon start cutting interest rates.
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The Federal Reserve’s Federal Open Market Committee (FOMC) is scheduled to meet on July 30th and 31st, with an interest rate decision due to be announced on July 31st.
Friday’s U.S. inflation data boosted expectations that the Federal Reserve will begin easing monetary policy in September. After the PCE data was released, expectations of a 25 basis point rate cut at the Fed’s September meeting remained stable at around 88%, according to CME’s FedWatch. Traders still largely expect two rate cuts by December, according to LSEG data.
India’s major stock market indexes on Friday snapped a five-day losing streak and closed with a strong gain, hitting their highest close in seven weeks, driven by heavy value buying at low levels.
The Sensex index rose 1,292.92 points or 1.62 percent to close at 81,332.72, while the Nifty 50 index rose 428.75 points or 1.76 percent to close at an all-time high of 24,834.85.
“After languishing in negative territory for the past five trading sessions, Indian markets have received strong buying support across the board and outperformed their global peers. The sharp recovery indicates that India remains a promising long-term investment destination and the economy continues to show strong resilience despite global uncertainties and geopolitical tensions. Also, most of the blue chip and mid-cap companies have reported improving performance, which has provided a major impetus to the market,” said Prashant Tapus, Senior Vice President (Research), Mehta Equities.
Market participants will be focusing on first quarter earnings, upcoming interest rate decisions by the US Federal Reserve, domestic and international macroeconomic data, foreign capital flows, developments in crude oil prices and other key global indicators that will shape market movements this week.
Key global market indications on Sensex today include:
Asian Market
Asian markets rose on Monday ahead of a week of decisions from major central banks in Japan, the United States and Britain.
Japan’s Nikkei rose 2.02% and the TOPIX gained 1.52%. South Korea’s KOSPI rose 0.8% and the KOSDAQ added 0.48%. Hong Kong’s Hang Seng Index futures opened lower.
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GIFT Nifty is trading near the 25,075 level, up nearly 160 points from the previous day’s closing price of Nifty futures, indicating a strong start for Indian stock market indices.
Wall Street
U.S. stocks closed higher on Friday, driven by buying in big technology stocks and inflation data that stoked optimism that the Federal Reserve will cut interest rates soon.
The Dow Jones Industrial Average rose 1.64% to 40,589.34, the S&P 500 added 1.11% to 5,459.10 and the Nasdaq Composite Index rose 1.03% to close at 17,357.88.
3M shares rose 23%, while Biogen shares fell 7.2% and Dexcom shares plummeted more than 40%.
US Inflation
U.S. inflation rose modestly in June. The personal consumption expenditures (PCE) price index rose 0.1 percent last month after being flat in May. For the 12 months to June, the PCE price index rose 2.5 percent after rising 2.6 percent in May. Economists surveyed by Reuters had expected monthly headline PCE and core inflation to both rise 0.1 percent in June.
China Industrial Profits
China’s industrial profits grew sharply in June. Official data showed profits rose 3.6 percent last month from a year earlier, following a 0.7 percent increase in May, and first-half profits rose 3.5 percent, accelerating from a 3.4 percent increase in the first five months of the year.
U.S. Treasury Yields
U.S. 10-year Treasury yields fell to their lowest in a week on Friday after data showed U.S. inflation rose slightly in June. The benchmark 10-year Treasury yield fell 5.6 basis points (bps) to 4.2%, dropping to 4.19%, the lowest level since July 19. The interest-rate-sensitive two-year Treasury yield fell 5.4 bps to 4.389%.
Oil prices
Oil prices rose from near six-week lows on Monday ahead of the OPEC meeting later in the week.
Brent crude rose 0.21% to $81.30 a barrel, after falling 1.5% on Friday for a third straight week of declines, while West Texas Intermediate (WTI) crude rose 0.05% to $77.20.
(With input from each institution)
Disclaimer: The views and recommendations expressed above are those of the individual analysts or brokerage firms and not that of Mint. We recommend checking with a certified professional before making any investment decisions.
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