The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to open lower on Wednesday, following weakness in global markets, as escalating US-Iran war in the Middle East weighed on risk-appetite.
Asian markets slipped, while the US stock market ended mostly lower overnight amid declining prospects for a truce in the Middle East war.
On Tuesday, the Indian stock market ended higher, snapping its two-day losing run, as pause in US-Iran hostilities improved global sentiment.
The Sensex gained 394.50 points, or 0.54%, to close at 73,918.76, while the Nifty 50 settled 119.10 points, or 0.52%, higher at 23,242.10.
“Indian markets are expected to stabilise in the near term amid talks of a truce between Israel and Iran and easing crude oil prices, which have improved overall market sentiment. However, the absence of a definitive resolution to geopolitical tensions, coupled with concerns over inflation, commodity price volatility and monsoon trends, may keep investors cautious and limit upside,” said Siddhartha Khemka – Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.
Here are key global market cues for Sensex today:
Asian Markets
Asian markets traded lower on Wednesday as escalating tensions in the Middle East dented investor sentiment. Japan’s Nikkei 225 declined 0.81%, while the Topix fell 0.32%. South Korea’s Kospi tanked 3.12%, and the Kosdaq fell 0.67%. Hong Kong Hang Seng index futures indicated a lower opening.
Gift Nifty Today
Gift Nifty was trading around 23,272 level, a discount of nearly 59 points from the Nifty futures’ previous close, indicating a negative start for the Indian stock market indices.
Wall Street
US stock market ended lower on Tuesday, after the US-Iran war escalated, adding to doubts about prospects for a truce in the Middle East war.
The Dow Jones Industrial Average rose 86.10 points, or 0.17%, to 50,872.11, while the S&P 500 declined 19.08 points, or 0.26%, to 7,386.65. The Nasdaq Composite closed 250.84 points, or 0.97%, lower at 25,678.82.
Nvidia stock price fell 0.22%, AMD shares declined 3.02%, Intel share price dropped 2.13%, Microsoft shares shed 2.02%, Apple stock price plunged 3.64%, and Tesla stock price slipped 3.00%.
US-Iran War
Iran’s Revolutionary Guards said they had attacked the US Fifth Fleet in Bahrain with drones in response to US strikes on areas in southern Iran, Reuters reported, quoting state media. The US Central Command said its military has completed strikes against Iranian air defense, ground control stations, and surveillance radar sites near the Strait of Hormuz in retaliation for the downing of a US helicopter.
Japanese Bond Yields
Japanese government bond (JGB) yields rose amid signs of rising inflation. The benchmark 10-year JGB yield climbed 3 bps to 2.695%. The yield on the 20-year JGB advanced 3 bps to 3.590%, while the 30-year yield gained 2.5 bps to 3.890%. The yield on the 40-year JGB held steady. The two-year yield rose 0.5 bp to 1.420%, while the five-year yield increased 1.5 bps to 1.940%.
Gold Rate Today
Gold prices fell as renewed hostilities between the US and Iran fuelled concerns about inflation and interest rate hikes. Spot gold price dropped 1.4% to $4,203.20 per ounce, while US gold futures for August delivery declined 1.4% to $4,227. Spot silver price fell 1.4% to $64.48 per ounce.
Crude Oil Prices
Crude oil prices rallied after the US military launched new strikes against Iran and as market data showed another large draw in US crude stocks. Brent futures gained 0.9% to $92.29 a barrel, while US West Texas Intermediate (WTI) crude rose 0.8% to $88.97.
Dollar
The dollar held steady against major peers. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.01% to 100.02. The euro fell 0.05% to $1.1537, while sterling dropped 0.04% to $1.337. The Japanese yen drifted 0.03% lower to 160.38 per dollar.
(With inputs from Agencies)
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