13/10/26, Gift Nifty signalling positivity

Indian benchmark indices Sensex and Nifty are likely to open on a mildly positive note on Tuesday, with GIFT Nifty signalling gains despite a sharp selloff across Asian markets. However, India's higher-than-expected retail inflation, elevated crude oil prices and escalating Middle East tensions could weigh on sentiment. Expectations of further RBI interest-rate hikes also add to concerns over the domestic outlook.

GIFT Nifty was trading at 22,425 around 8 am, up 55 points, or 0.25 percent. Indian equities ended sharply lower on Monday, with the Sensex falling 547.65 points, or 0.76 percent, to 71,924.68 and the Nifty declining 157.10 points, or 0.70 percent, to 22,363.35. Foreign institutional investors remained net sellers, offloading equities worth Rs 1,700 crore, while domestic institutions bought shares worth more than Rs 3,000 crore.

India's retail inflation rises to 5.54 percent

India's retail inflation accelerated to a higher-than-expected 5.54 percent in September, moving closer to the Reserve Bank of India's upper tolerance limit of 6 percent and strengthening expectations of further interest-rate hikes. The increase comes amid sustained pressure from elevated crude oil prices and a weak monsoon, with the Iran war, now in its eighth month, continuing to disrupt energy supplies and fuel inflation concerns.

The inflation reading follows the RBI's decision earlier this month to raise the repo rate by 25 basis points to 5.50 percent, its first increase since February 2023, and shift its policy stance to calibrated tightening. The combination of higher inflation and tighter monetary conditions could add to pressure on rate-sensitive sectors.

13/10/26, Expecting Positive Opening

 Indian benchmark indices are likely to open on a firm note on October 13, tracking GIFT Nifty, which was trading higher at around 22,415.50 in early trade

After rebounding in the previous session, Indian equity benchmarks came under renewed selling pressure on October 12, with the Nifty slipping towards 22,300 amid losses in IT, FMCG and financial stocks.

At close, the Sensex was down 547.65 points or 0.76 percent at 71,924.68, and the Nifty was down 157.10 points or 0.70 percent at 22,363.35.

Broader markets outperformed the benchmark indices, with the Nifty Midcap index ending flat, while the Nifty Smallcap index advanced 1.4%.

Here is how financial markets across the globe fared overnight:

GIFT Nifty (Up)

GIFT Nifty was trading higher at around 22,415.50 in early trade, indicating a positive start for the domestic equity markets.

Asian Markets (Slip)

Asian stocks declined as the artificial intelligence trade, one of the hottest corners of the market this year, came under renewed pressure ahead of a key earnings season.

The MSCI Asia Pacific Index lost 0.9%, set for its weakest close since mid-August, as shares retreated in South Korea and Japan.

The Kospi Index — a barometer for the AI trade — slipped as much as 4.8%, set for its lowest close since July as chip bellwethers SK Hynix Inc. and Samsung Electronics Co. both tumbled more than 5%. The Nikkei 225 Index dropped 2% after traders in Tokyo returned after a long weekend.

US Equities (Down)

The technology-heavy Nasdaq composite closed lower on Monday as oil prices jumped nearly $2 a ​barrel after attacks on a Saudi airport, and investors waited for banks to kick off the third-quarter earnings season and for economic data this week.

The S&P ‌500 ended the session barely lower while the Dow advanced.

The Dow Jones Industrial Average rose 195.60 points, or 0.38%, to 51,850.55; the S&P 500 lost 4.30 points, or 0.06%, to 7,807.24 and the Nasdaq Composite lost 120.27 points, or 0.44%, to 27,245.90.

Dollar Index (Down)

The dollar held its ground at the start of Asian trading on Tuesday after a holiday for some markets in the US, as geopolitical risks rose after renewed attacks on energy infrastructure in the Middle East and Ukraine.

US Bond Yield (Down)

The yield on 10-year Treasuries declined three basis points to 5.2%, while 2-year Treasuries were down marginally at 4.77%.

Asian Currencies (Down)

Asian currencies traded lower against the US dollar, with the South Korean won leading the losses, declining 0.214 percent, followed by the Taiwan dollar, which fell 0.175 percent. The Philippine peso and Indonesian rupiah also depreciated by 0.129 percent and 0.078 percent, respectively. The Thai baht, Chinese renminbi and Malaysian ringgit edged lower by 0.027 percent, 0.016 percent and 0.015 percent, respectively. Meanwhile, the Japanese yen appreciated 0.152 percent and the Singapore dollar remained unchanged.

Crude (Down)

Oil prices edged lower on Tuesday after climbing by nearly $2 a barrel in the previous session, as traders assessed supply risks from attacks on Saudi Arabia while weighing the prospect of additional diesel supplies from Russia.

Brent crude futures fell 61 cents, or 0.57%, to $106.04 a barrel while US West Texas Intermediate crude futures were down 47 cents, or 0.5%, at $93.27 a barrel.

Brent futures settled at $106.65 a barrel on Monday, the highest since September 15.

Gold (Slips)

Gold held a loss as the spreading conflict in the Middle East stoked fears that further energy supply disruptions could keep inflation elevated and increase the prospects for interest-rate hikes.

Bullion traded near $4,160 an ounce, after ending the previous session 0.5% lower.

Fund Flow Action

Foreign institutional investors (FIIs) remained net sellers on October 9, offloading equities worth Rs 1,700 crore, while domestic institutional investors (DIIs) continued to support the market, purchasing equities worth over Rs 3,000 crore during the session.

Hope you're all set for today's trade. We wish you a profitable day ahead

Report by Mr Rakesh Patil

Source: Network18