The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to open sharply lower on Thursday, following steep losses in global markets, amid worries over surging crude oil prices.
Asian markets traded lower, while the US stock market slumped overnight after the US Federal Reserve policy decision, with the S&P posting its lowest close in nearly four months.
On Wednesday, the Indian stock market extended its rally for the third consecutive session, despite caution over the ongoing US-Iran war in the Middle East.
The jumped 633.29 points, or 0.83%, to close at 76,704.13, while the Nifty 50 settled 196.65 points, or 0.83%, higher at 23,777.80.
“Markets will track developments in West Asia, movements in crude oil prices and trends in foreign fund flows for directional cues. Updates on India–US trade agreement and the Federal Reserve interest rate decision will also be key triggers,” said Siddhartha Khemka – Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
Here are key global market cues for Sensex today:
Asian Markets
Asian markets traded lower on Thursday, following overnight losses on Wall Street, after the US Federal Reserve policy and the escalating US-Iran war that drove oil prices higher.
Japan’s Nikkei 225 declined 2.47%, while the Topix fell 1.82%. South Korea’s Kospi plunged 2.56%, and the Kosdaq dropped 1.73%. Hong Kong’s Hang Seng index futures indicated a lower opening.
Gift Nifty Today
Gift Nifty was trading around 23,251 level, a discount of nearly 525 points from the Nifty futures’ previous close, indicating a gap-down start for the Indian stock market indices.
Wall Street
US stock market ended sharply lower on Wednesday after the Federal Reserve kept interest rates unchanged and projected only a single rate cut for the year.
The Dow Jones Industrial Average declined 1.63% to 46,225.15, while the S&P 500 dropped 1.36% to end the session at 6,624.70, its lowest close in nearly four months. The Nasdaq closed 1.46% lower at 22,152.42.
Nvidia stock price fell 0.84%, AMD shares gained 1.6%, Apple stock price dropped 1.69%, Microsoft share price fell 1.91%, Amazon stock price dropped 2.48%, while Tesla stock price fell 1.63%. Micron Technology shares tumbled 4.3%.
US Federal Reserve Policy
The left the benchmark interest rates unchanged in the 3.5% to 3.75% range for the second consecutive time. The Fed Chair Jerome Powell-led FOMC projected higher inflation, steady unemployment and a single reduction in borrowing costs this year.
US-Iran War
The escalated as Iran attacked gas facilities in Qatar after Israel launched an attack against Iran’s South Pars offshore natural gas field in the Persian Gulf that it shares with Doha. Israel killed Iran’s intelligence minister as it kept up its campaign against the Islamic Republic”s top leadership and reportedly attacked an Iranian offshore natural gas field.
US Producer Price Index
US producer prices increased by the most in seven months in February. The Producer Price Index for final demand surged 0.7% last month, the most since last July, after an unrevised 0.5% increase in January. Economists polled by Reuters had forecast a gain of 0.3%. In the 12 months through February, the PPI increased 3.4%, the fastest rate of growth in a year, and followed a 2.9% advance in January.
Crude Oil Prices
Crude oil prices jumped amid attacks on the energy infrastructure in the Middle East. Brent crude oil price surged 3.71% to $111.36 a barrel, while the US West Texas Intermediate (WTI) crude futures rallied 2.97% to $99.18.
US Treasury Yields
US Treasuries pared their losses after the Federal Reserve maintained its projection on one interest rate cut this year. The yields on two-year notes rose by two basis points to about 3.69%, while 10-year yields traded one basis point higher around 4.21%.
Dollar
The US dollar index, which measures the greenback’s strength against a basket of six currencies, edged down 0.1% to 100.11, holding near its highest levels of the last four months. The yen was up 0.1% at 159.78, edging back from its weakest levels in two years. The euro climbed 0.1% to $1.1469, while the British pound nudged up 0.1% to $1.3273.
Gold Rate Today
Gold prices steadied after tumbling nearly 4% in the previous session. Spot rose 0.4% to $4,835.55 an ounce, while silver prices climbed 0.7% to $75.87.
(With inputs from Reuters)