Trading of the GIFT Nifty futures indicates that the Nifty 50 index could fall 14.50 points at opening today. The weak start to equities on Dalal Street today will most likely come as a reaction from traders to the RBI's hawkish tone in minutes of meeting and also amidst week global cues.
The central bank has hinted that further rate hikes could be a possibility due to re-emergng of inflationary pressures. Although, RBI expects vegetable prices shocks to calm ahead, however, it sees risks to the food and the overall inflation outlook from El Nino conditions, volatile global food prices and skewed monsoon distribution. And hence, RBI said these factors warrant a close monitoring.
Global Markets:
The US Dow Jones index futures were up 45 points, indicating a positive opening in the US stocks today.
Asia-Pacific markets fell across the board as investors prepared for signals on U.S. monetary policy from central bankers' comments at the Jackson Hole meeting on Friday, including a speech by U.S. Federal Reserve chair Jerome Powell.
In Asia, the core inflation rate for Japan's capital Tokyo came in at 2.8% for August, slightly below the market expectation of 2.9%. This is the lowest growth rate seen in Tokyo's core inflation since September 2022.
Overall inflation for Tokyo came in at 2.9%, lower than the 3.2% seen in July.
On Thursday in the U.S., all three major indexes fell as the tech fueled rally ended, with the Dow Jones Industrial Average seeing its worst day since March, while the S&P 500 and the Nasdaq Composite saw their biggest one-day loss since Aug. 2.
The Dow closed 1.08% lower and the S&P 500 lost 1.35%. The Nasdaq saw the largest loss, shedding 1.87%.
All of the S&P sectors were in the red on Thursday, with information technology, consumer discretionary and communication services being the biggest laggards of the market. Financials made a short-lived recovery in the afternoon, rising just above flat.
Philadelphia Federal Reserve President Patrick Harker has reportedly said on Thursday that he doesn't see the need for further interest rate hikes and could see cuts happening in 2024 depending on data.
Initial jobless claims last week fell more than expected, the Labor Department reported Thursday. First-time filings for unemployment benefits totaled 230,000 for the period ended Aug. 19, a decrease of 10,000 from the previous week and less than the Dow Jones estimate for 240,000.
Continuing claims, data for which runs a week behind, totaled 1.702 million, a slight decrease but a bit higher than the widely reported market estimate of 1.69 million.
Domestic Equity Market:
The domestic stock market's three-day winning streak came to a halt on Thursday, with Nifty index closing below the 19,400 mark after touching a morning session high of 19,584.45. The fluctuations in trading were largely attributable to the expiry of weekly index options on the NSE. The ambiguity hanging over the global economic climate encouraged investors to tread lightly, avoiding substantial financial bets.
The barometer index, the S&P BSE Sensex declined 180.96 points or 0.28% to 65,252.34. The Nifty 50 index lost 57.30 points or 0.29% to 19,386.70. In the past three consecutive sessions, the Sensex had advanced 0.75% while the Nifty rose 0.69%.
Foreign portfolio investors (FPIs) bought shares worth Rs 1,524.87 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 5,796.61 crore in the Indian equity market on 24 August 2023, provisional data showed.
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