The Indian stock market is expected to open higher on Thursday, following gains in global markets, as bond yields cooled and crude oil prices remained steady. The trends on Gift Nifty also signal a positive start for the Indian benchmark indices, Nifty 50 and Sensex, today.
The Gift Nifty was trading around 24,214 level, a premium of nearly 97 points from the Nifty futures' previous close.
On Wednesday, the Indian stock market ended lower, with the benchmark Nifty 50 closing below 24,100 level.
The Sensex dropped 325.78 points, or 0.42%, to close at 76,909.68, while the Nifty 50 settled 76.60 points, or 0.32%, lower at 24,078.30.
“Given the prevailing combination of elevated crude prices, geopolitical uncertainty and weak market momentum, we recommend maintaining a cautious, stock-specific approach with a strong focus on risk management,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.
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He recommends participants to selectively consider auto, realty and defence stocks on dips for long opportunities, while relatively weaker pockets such as FMCG and energy could offer selective short-selling opportunities, subject to appropriate risk controls.
Here are five key factors to know ahead of the opening of the Indian stock market today:
Asian Markets
Asian stock markets traded higher on Thursday, following overnight gains on Wall Street. Japan's Nikkei 225 rallied 1.39%, while the Topix gained 1.02%. South Korea's Kospi jumped 4.51%, while the Kosdaq added 1.42%.
Wall Street
US stock market ended higher on Wednesday as Treasury yields fell after the announcement of increased buyback operation for longer-term debt.
The Dow Jones Industrial Average rose 119.65 points, or 0.22%, to close at 53,463.05, while the S&P 500 gained 16.22 points, or 0.21%, to end at 7,707.98. The Nasdaq Composite ended 0.16% higher at 26,331.09.
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Iran Sanctions
US President Donald Trump announced “an unprecedented economic warfare operation” against Iran, after faulting the country for failing to take its chance to make a deal with him. “This will be Economic Warfare and Isolation on an unprecedented scale,” Trump said in a social media post.
US Fed Meeting Minutes
Several US Federal Reserve officials favoured an interest-rate hike last month, the minutes of the central bank's most recent policy meeting showed. Many Fed officials also indicated that policy tightening would be necessary if inflation didn't decline, Bloomberg reported. However, uncertainty continued to weigh heavily on Fed officials at their July 28-29 meeting.
US Treasury Yields
US Treasury yields declined, following an announcement that the Treasury Department would double the size of liquidity support buyback operations for longer-dated notes and bonds The benchmark US 10-year Treasury yield fell 5.1 basis points (bps) to 4.655%, while the yield on the 30-year bond fell 9 bps to 5.19%.
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