The Indian stock market rebounded on Thursday, benefiting from a significant rally in global markets, particularly in the United States. The Sensex and Nifty 50 indices opened strongly, reflecting investor optimism following positive cues from international markets.
Across Asia, markets exhibited upward momentum as well, with the Japanese Nikkei 225 and Topix both recording gains of 0.5% and 0.4%, respectively. South Korea’s Kospi rose 0.2%, while the Kosdaq saw a slight decline of 0.2%. Futures for the Hong Kong Hang Seng index also suggested a positive start.
This optimistic beginning came after a recent session where the Indian stock markets faced profit-taking towards the end of the day and closed lower following the Reserve Bank of India’s policy announcement. On Wednesday, the Sensex decreased by 167.71 points (0.21%) to settle at 81,467.10, and the Nifty 50 closed down by 31.20 points (0.12%) at 24,981.95.
According to market analysts, the profit-taking was a result of investors exercising caution ahead of the second quarter earnings season, which is anticipated to be critical for the markets’ performance in the coming weeks. Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, stated, โFor markets to perform well going ahead, strong conviction is required and the earnings season will be the key thing to look out for over the next few weeks.โ
Global Market Overview
As the Indian market opened, it was influenced by strong performances from Wall Street, where the S&P 500 and Dow Jones Industrial Average achieved record closing highs. The Dow jumped 431.63 points (1.03%) to finish at 42,512.00, and the S&P 500 rose by 40.91 points (0.71%) to close at 5,792.04. Notably, the Nasdaq Composite also climbed, adding 108.70 points (0.60%) to end at 18,291.62.
Despite the overall positive outlook for the US markets, certain stocks faced challenges. Shares of Alphabet fell by 1.5%, and Boeing dropped 3.4%. In contrast, Norwegian Cruise Line saw a significant increase of 10.9%, while Carnival and Royal Caribbean experienced gains of 7% and 5.2%, respectively.
Factors Influencing Markets
Recent economic indicators and central bank announcements have been pivotal in shaping market sentiment. The minutes from the September Federal Open Market Committee (FOMC) meeting revealed that a significant majority of US Federal Reserve officials advocated for easier monetary policy, including potential rate cuts. This dovish stance has contributed to a favorable outlook for equities.
Currency and Economic Indicators
The US dollar remained strong, trading near a two-month peak against other major currencies. The dollar index was stable at around 102.86, having touched highs of 102.93 earlier. Additionally, Japan reported a 2.8% increase in wholesale prices in September compared to the previous year, indicating ongoing inflationary pressures rather than the expected 2.3% rise.
On another front, China’s central bank has launched a new funding scheme, allowing financial institutions to apply for a program designed to support the capital market. This initiative is expected to ease liquidity conditions in the market significantly.
Market Outlook
With the Indian stock market poised for a higher opening, investors are closely monitoring global cues and upcoming earnings reports. The emphasis on earnings will become increasingly crucial as the week progresses, providing insight into corporate performance and influencing investor sentiment.
As we navigate through fluctuating market dynamics, it is vital for investors to stay informed and agile. Continuous monitoring of economic indicators, corporate earnings, and market trends will be essential for making strategic investment decisions.
