The Indian stock market indices, Sensex and Nifty 50, are anticipated to commence trading on a tepid note today, mirroring mixed signals from global counterparts. Asian markets exhibited varied trends, while the US stock market witnessed a slight decline last week amid speculation regarding potential interest rate cuts by the US Federal Reserve.
Traders are closely monitoring the possibility of a rate reduction in September, with a 56% probability, according to the CME’s FedWatch tool. Additionally, the formation of the new government under Prime Minister Narendra Modi, who along with his 71 ministers, took oath on Sunday, is expected to impact market sentiment.
In the previous session, Indian stock market indices concluded at record closing highs, driven by the Reserve Bank of India’s decision to maintain the repo rate and policy stance unchanged. The Sensex surged 1,618.85 points, or 2.16%, to settle at 76,693.36, while the Nifty 50 soared 468.75 points, or 2.05%, closing at 23,290.15.
Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd., remarked, “Now hopes have revived that the US Federal Reserve might cut interest rates in the September meet based on recent macro data points. This week, focus will be on allocation of key cabinet portfolios such as Finance, Defense, Roads, Energy, Commerce, and Railways. The market will continue to be volatile with upward biasedness.”
Investors will closely monitor global and domestic triggers this week, including the US Federal Reserve policy, Bank of Japan interest rate decision, US inflation data, India’s retail inflation data, and key policy decisions of the BJP-led coalition government.
In Asian markets, Japan’s Nikkei 225 gained 0.19%, and the Topix rose 0.38%, while South Korea’s Kospi fell 1% and the Kosdaq dropped 0.5%. Notably, stock markets in mainland China, Hong Kong, Taiwan, and Australia are closed today.
The Gift Nifty is currently trading around the 23,290 level, indicating a weak start for the Indian stock market indices with a discount of nearly 40 points from the Nifty futures’ previous close.