The Indian stock market is expected to open on a positive note today, with benchmark indices Sensex and Nifty likely to continue their upward momentum after hitting record highs in the previous session. As of 7:39 AM, GIFT Nifty futures were trading up by 57 points at 25,391, indicating a bullish start to the day. On Thursday, both Sensex and Nifty recorded over 1% gains, pushing them to new all-time highs.
Record-High Closing on Thursday
In the previous trading session, the Sensex surged by 1,439.55 points, or 1.77%, to close at 82,962.71, surpassing the 83,000 mark for the first time in history. Meanwhile, the Nifty 50 also posted substantial gains, rising 470.45 points, or 1.89%, to settle at 25,388.90, breaking the 25,400 level. The rally was driven by strong buying interest across sectors, reflecting positive investor sentiment.
Domestic Data: CPI and Industrial Production
India’s Consumer Price Index (CPI) for August stood at 3.65%, slightly higher than July’s figure of 3.54% and above market expectations of 3.47%. Despite the increase, inflation remains under control, providing some relief to market participants. However, industrial production growth for March 2024 slowed marginally to 4.9% month-on-month, reflecting a slight deceleration in economic activity.
Global Market Overview
On Thursday, U.S. markets registered gains as investors reacted to stronger-than-expected producer price index (PPI) data. The PPI for final demand rose 0.2% in August, slightly above estimates of 0.1%, while the core PPI, excluding food and energy, increased by 0.3%, surpassing the 0.2% forecast. These figures reinforced expectations that the Federal Reserve may cut interest rates by 25 basis points at its next policy meeting.
In the U.S., the Dow Jones Industrial Average closed 0.58% higher, the S&P 500 gained 0.75%, and the Nasdaq Composite rose by 1%. The positive performance of U.S. markets is likely to influence Indian equities positively today.
Asian Market Performance
Asian markets opened on a mixed note today. As of the last count, Japan’s Nikkei index had declined by 0.43%, while Australia’s ASX 200 posted a gain of 0.46%. Meanwhile, Hong Kong’s Hang Seng was flat, and Shanghai’s benchmark index showed a slight negative bias. The performance of Asian markets will be a key factor in shaping the Indian markets’ opening session.
Global Economic Triggers
Investors are keenly awaiting the release of key U.S. export and import data for August, along with next week’s policy decision by the Federal Reserve. In Europe, the European Central Bank (ECB) recently cut its deposit rate by 25 basis points to 3.5%, continuing its efforts to keep inflation in check. The ECB’s decision follows a similar rate cut in June, as inflation in the region approaches the ECB’s 2% target.
In the Asia-Pacific region, critical economic data to watch includes Korea’s export and import figures for August, Singapore’s unemployment rate for Q2, Japan’s industrial production data for July, and China’s loan growth data for August. Back home in India, investors will be monitoring passenger vehicle sales data for August and the Foreign Exchange reserves data for September.
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Oil Prices Steady Amid Supply Concerns
Crude oil prices remained steady on the back of output disruptions in the U.S. Gulf of Mexico due to Hurricane Francine. As of the latest data, Brent crude futures were up by 0.5%, trading at $72.33 per barrel. The disruptions in oil production are being closely watched, as any further impact on supply could push oil prices higher.
Analysts’ Views on Today’s Trading Session
- Shrikant Chouhan, Head of Equity Research, Kotak Securities, notes that while the market’s current texture is weak, a fresh sell-off could occur if the Nifty dips below the 24,900/81,400 levels. However, if it holds above 25,000/81,800, there is a potential for a bounce back toward 25,100-25,150 and 82,150-82,500.
- Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, points to the formation of a long bullish candle on the daily chart, indicating a breakout above the crucial 25,200 level. He expects the market to continue its upward momentum, with the next target being around 25,800.
- Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas, highlights that the Nifty has broken out of a sideways consolidation, signaling the start of the next leg of the upmove toward 25,500-25,700. The Nifty Bank index has also moved higher and is expected to target 52,000-52,500.
IPO Watch
Several IPOs are in focus today. The Western Carriers (India) Ltd IPO opens for subscription, combining a fresh issue of ₹400 crore and an offer for sale of ₹92.88 crore. Additionally, Envirotech Systems Ltd and Deccan Transcon Leasing Ltd IPOs open for subscription on the NSE SME platform, while Popular Foundations Ltd IPO opens on BSE SME.
Conversely, the IPOs for Excellent Wires and Packaging Ltd and Innomet Advanced Materials Ltd close for subscription today.
As the Indian markets prepare for the day’s trading, investors can expect another session of potential gains following Thursday’s record highs. Global cues, domestic economic data, and market sentiment will drive the direction of the Sensex and Nifty. Traders should watch key support and resistance levels closely as market movements unfold.
