6 things that changed for the stock market overnight - Gift Nifty to hawkish Fed Chair Jerome Powell

The Indian stock market is expected to open lower on Friday tracking losses in global markets after hawkish comments from the US Federal Reserve Chairman Jerome Powell.

Asian markets traded lower, while the US stocks ended in the red overnight as treasury yields rose after the Fed Chair signaled that the central bank may need more interest rate hike to bring down inflation.

On Thursday, the domestic equity benchmark indices ended lower amid mixed global cues.

The BSE Sensex fell 143.41 points, or 0.22%, to close at 64,832.20, while the NSE Nifty 50 ended 48.20 points, or 0.25%, lower at 19,395.30.

“Nifty 40 after the upmove last week, is in consolidation mode. It has been unable to cross the 19,450-19,500 levels for the last 4 trading sessions. Overall we expect the ongoing recovery to continue and any dips can be used as a buying opportunity,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Here are key domestic and global market cues for Sensex today:

Asian Markets

Asian markets traded lower on Friday tracking overnight losses in the US stocks.

Japan’s Nikkei 225 declined 0.76% and the Topix fell 0.49%. South Korea’s Kospi dropped 0.83%, while the Kosdaq plunged 1.13%.

Hong Kong’s Hang Seng index futures was slightly higher at 17,546 compared with the HSI’s close of 17,511.29.

Also Read: Dividend stocks: Dabur, Indian Oil, IRFC, 16 other shares to trade ex-dividend today

Australia’s S&P/ASX 200 traded 0.49% lower.

Gift Nifty was trading around 19,386 level as against Nifty futures’ previous close of 19,476, indicating a gap-down opening for the Indian benchmark indices.

Wall Street

The US stock market ended lower Thursday amid a rise in Treasury yields and hawkish comments from US Federal Reserve Chair Jerome Powell.

The Dow Jones Industrial Average declined 220.33 points, or 0.65%, to 33,891.94, while the S&P 500 fell 35.43 points, or 0.81%, to 4,347.35. The Nasdaq Composite ended 128.97 points, or 0.94%, lower at 13,521.45.

US Treasury yields rose after a weak auction of $24 billion in 30-year Treasuries. The benchmark 10-year Treasury note yield was last up 12.8 basis points at 4.636% after rising as high as 4.654% on the day.

Among stocks, Walt Disney shares jumped 6.9% as its quarterly profit beat estimates. Arm Holdings shares dropped 5.2% on a downbeat third-quarter sales forecast.

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Hawkish Fed Chair Jerome Powell

The US Federal Reserve will not hesitate to tighten policy further if appropriate, said Chair Jerome Powell on Thursday. Speaking at an International Monetary Fund (IMF) conference in Washington, Powell said, “If it becomes appropriate to tighten policy further, we will not hesitate to do so.”

The Fed “is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2% over time; We are not confident that we have achieved such a stance,” Powell said.

Read here: US Federal Reserve won’t hesitate to tighten policy further if appropriate: Jerome Powell

US jobless claims fall

The number of Americans filing new claims for unemployment benefits fell last week as the labor market continued to show few signs of a significant slowdown, Reuters reported.

Initial claims for state unemployment benefits fell 3,000 to a seasonally adjusted 217,000 for the week ended November 4 from an upwardly revised 220,000 in the prior week, the Labor Department said on Thursday. Economists polled by Reuters had forecast 218,000 claims for the latest week.

Treasury yields rise

US Treasury yields jumped on Thursday after Fed Chair Powell said policymakers “are not confident” interest rates are high enough to bring inflation down to the 2% target.

The yield on 10-year notes rose 12.4 basis points (bps) to 4.632% and the two-year's yield, which reflects interest rate expectations, rose 9.9 bps to 5.035%.

A weak auction of $24 billion in 30-year Treasuries pushed yields higher.

Moody's retains India 2023 growth at 6.7% 

Moody's Investor Services retained India’s economic growth at 6.7% for 2023, citing the country’s remarkable resilience amid a global slowdown buoyed by solid domestic demand.

Moody’s expects India's GDP (gross domestic product) to grow 6.7% in 2023, 6.1% in 2024 and 6.3% in 2025.

(With inputs from Reuters)

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