6 things that changed for the stock market over the weekend - Gift Nifty to selloff on Wall Street
- MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1% to be near its lowest in almost a year.
The Indian stock market indices, Nifty 50 and Sensex, are likely to open lower on Monday amid weak global cues.
The Asian markets traded mostly lower, while the US stocks ended in deep red on Friday amid escalations of the Israel-Hamas war.
Global market, including India, will take further cues from geopolitical developments, oil prices and bond yield fluctuations, along with earnings of major companies.
“We expect earnings season to pick up pace in a truncated week which would direct the market trend along with global cues. On the global front, ECB (European Central Bank) will announce interest rate decision this week,” Siddhartha Khemka, Head – Retail Research at Motilal Oswal Financial Services Ltd, said.
Here are key domestic and global market cues for Sensex today:
Asian Markets
Asian markets traded lower on Monday as risks of a wider conflict in the Middle East dented investor sentiment ahead of a week of inflation data across Asia-Pacific region with data on US growth and inflation.
MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.1% to be near its lowest in almost a year.
Japan’s Nikkei 225 fell 0.44% and the Topix eased 0.12%. South Korea’s Kospi was flat, while the Kosdaq gained 0.51%.
Hong Kong’s markets are closed for a holiday Monday.
Australia’s S&P/ASX 200 declined 0.93%.
Gift Nifty was trading around 19,502 level as compared to Nifty futures’ Friday’s close of 19,523, indicating a weak start for the Indian equity indices.
Wall Street
US stock market indices ended sharply lower on Friday, dragged by heavy selling in technology and financials, amid worries over more interest rate hikes and the escalation of the Israel-Hamas war.
The Dow Jones Industrial Average declined 286.89 points, or 0.86%, to 33,127.28, while the S&P 500 dropped 53.84 points, or 1.26%, to 4,224.16. The Nasdaq Composite plunged 202.37 points, or 1.53%, to end at 12,983.81.
For the week, the Dow fell 1.6%, the S&P 500 slipped 2.4% and the Nasdaq dipped 3.2%.
Among stocks, American Express declined 5.4% even after the company’s third-quarter profit beat expectations, while SolarEdge shares crashed 27.3% after it warned of significantly lower revenue in the fourth quarter.
Also Read: Wall Street week ahead: Earnings from Amazon, Alphabet, Microsoft, Meta Platforms in focus
Fed flags concerns about inflation pressures
A Federal Reserve report flagged concerns about the risks of persistent inflation, the potential for large losses in the US office market and funding pressures on some banks, Bloomberg reported.
The Financial Stability Report released Friday said deposit flows have since stabilized across the banking sector. “However, a subset of banks continued to face funding pressures, reflecting concerns over uninsured deposits and other factors,” the Fed said.
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Fed's Mester says interest rates near peak
Federal Reserve Bank of Cleveland President Loretta Mester said on Friday her outlook for central bank interest rate policy still leans toward another increase, while noting amid current economic uncertainties now is a time where policymakers need to be “nimble”, Reuters reported.
“Regardless of the decision made at our next meeting, if the economy evolves as anticipated, in my view, we are likely near or at a holding point on the funds rate as we accumulate more information on economic and financial developments and assess the effects of the tightening in financial conditions that has already occurred,” Mester said in a speech.
Yen hovers around 150/$
Japan’s yen traded near the 150-per-dollar level as investors bet on a further rise in dollar yields, while some expecting Japanese authorities would intervene in markets.
The Japanese yen last traded at 149.83 per dollar, after a brief trip early on Monday to 150.14, a level last seen on October 3 when traders had suspected the Bank of Japan intervened to nudge it to the stronger side of 150, Reuters reported.
The dollar index added 0.02% to 106.19, with the euro down 0.07% at $1.0586.
Banking sector earnings
A slew of Indian banks announced their quarterly earnings over the weekend including ICICI Bank, Kotak Mahindra Bank, Yes Bank, RBL Bank and IDBI Bank.
ICICI Bank reported a 35.8% YoY rise in its standalone net profit to ₹10,261 for the second quarter of FY24, while its net interest income (NII) increased by 23.8% YoY to ₹18,308 crore.
Kotak Mahindra Bank posted a 24% YoY rise in its standalone net profit to ₹3,191 crore, while its NII increased 23% YoY to ₹6,297 crore in Q2FY24.
Yes Bank’s net profit surged 47.4% YoY to ₹225 crore, while that of RBL Bank jumped 46% to ₹294 crore and IDBI Bank’s rose 59.8% to ₹1,323.3 crore in the July-September quarter.
(With inputs from Agencies)
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