6 things that changed for the stock market overnight - Gift Nifty to looming US govt shutdown

The Indian stock market indices, Sensex and Nifty 50, are likely to see a weak opening on Tuesday following mixed cues from global peers.

The Asian markets were mostly lower, while the US stock market ended with gains overnight.

On Monday, the domestic benchmark equity indices ended flat as sentiment remained fragile on concerns of higher interest rates and faltering economic growth.

“We expect weakness to persist in the market amid cautiousness ahead of the monthly F&O expiry this week and economic data like India’s Infrastructure Output for the month of August US and UK Q2 GDP data and US and China manufacturing PMI data to be released,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — September 26

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

Asian Markets

Asian markets were trading mostly lower on Tuesday as concerns about China’s property sector re-surfaced. 

Japan’s Nikkei 225 fell 0.42% and the Topix declined 0.23%. South Korea’ Kospi shed 0.59%, but the Kosdaq gained 0.49%.

Hong Kong’s Hang Seng index futures were at 17,744 compared to the HSI’s close of 17,729.29.

Australia’s S&P/ASX 200 dropped 0.29% ahead of consumer price index reading on Wednesday.

Meanwhile, Gift Nifty was trading at 19,661 as against Nifty futures’ previous close of 19,704.75, indicating a negative opening for the Indian benchmark index.

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Wall Street

US stock market indices ended higher on Monday led by gains in energy shares.

The Dow Jones Industrial Average rose 43.04 points, or 0.13%, to 34,006.88, while the S&P 500 gained 17.38 points, or 0.40%, to 4,337.44. The Nasdaq Composite ended 59.51 points, or 0.45%, higher at 13,271.32.

Investors through the week will be monitoring data including on durable goods and the personal consumption expenditures price index for August, and second-quarter Gross Domestic Product, as well as remarks by Fed policymakers, including Chair Jerome Powell.

Among stocks, Amazon shares price rose 1.7% after the e-commerce giant said it will invest up to $4 billion in startup Anthropic, in its effort to compete with growing cloud rivals on artificial intelligence.

Exxon Mobil gained 1.1% and ConocoPhillips added 1.6%. Netflix rose 1.3%, while The Walt Disney Co. slipped 0.3%.

US government shutdown to be credit negative

The US Federal government is heading toward a shutdown if Congress fails to provide funding for the fiscal year starting October 1. The US Congress so far has failed to pass any spending bills to fund federal agency programs in the fiscal year starting on October 1 amid a Republican Party feud.

Meanwhile, ratings agency Moody's said a US government shutdown would be “credit negative” as it would highlight the weakness of US institutional and governance strength compared to other top-rated governments, even though its economic impact will likely be short-lived.

The stern warning coming one month after Fitch downgraded the US by one notch on the back of a debt ceiling crisis.

Also Read: Global markets update: US stocks rise, European shares slip

Amazon to invest $4 billion in AI startup Anthropic

Amazon.com said it will invest up to $4 billion in the high-profile startup Anthropic, in its effort to compete with growing cloud rivals on artificial intelligence.

In a joint interview, the CEOs of Amazon's cloud division and Anthropic said the immediate investment will be $1.25 billion, with either party having the authority to trigger another $2.75 billion in funding by Amazon, Reuters reported.

Amazon's employees and cloud customers will gain early access to technology from Anthropic as part of the deal, which they can infuse into their businesses. The San Francisco-based startup also committed to rely primarily on Amazon's cloud services, including training its future AI models on large quantities of proprietary chips it would buy from the online retailing and computing giant.

US Dollar at 10-month peak; bond yields spike

The dollar stood at 10-month highs against a basket of major currencies on Tuesday, supported by US bond yields scaling 16-year peaks. The US dollar index touched its highest since November at 106.1.

The Government bonds declined while the yields spiked as traders speculated central banks will keep interest rates elevated to control inflation. The US Treasury 10-year yield jumped nearly 10 basis points to a high of 4.53%, a level last seen in 2007.

SME stocks to come under ASM framework

Stock exchanges BSE and NSE said that stocks in the small and medium enterprises (SME) segment will come under the framework of Additional Surveillance Measures (ASM) and trade-to-trade settlement to curb volatility in such shares.     

The move is aimed at curbing speculative trading in the SME space, where retail participation has been increasing.

(With inputs from Reuters)