6 things that changed for the stock market overnight - Gift Nifty to selloff in US tech stocks

  • The Asian markets traded lower, while the US stock indices ended sharply lower as treasury yields rose, reviving fears that interest rates could stay higher for longer.

Livemint, Edited By Ankit Gohel
Updated26 Oct 2023, 07:45 AM IST
Japan’s Nikkei 225 fell 1.30%. South Korea’s Kospi index declined 1.51%, while the Kosdaq index dropped 2.3%.
Japan’s Nikkei 225 fell 1.30%. South Korea’s Kospi index declined 1.51%, while the Kosdaq index dropped 2.3%. (Image: Reuters)

The Indian stock market indices, Sensex and Nifty 50, are expected to open lower on Thursday following weak global cues.

The Asian markets traded lower, while the US stock indices ended sharply lower as treasury yields rose, reviving fears that interest rates could stay higher for longer.

The domestic indices ended in the negative territory for the fifth consecutive session on Wednesday amid concerns over the ongoing Israel-Hamas war while unimpressive Q2 earnings and gains in US Treasury yields also weighed on sentiment.

The Sensex closed 522.82 points, or 0.81%, lower at 64,049.06, while the Nifty 50 ended at 19,122.15, down 159.60 points, or 0.83%.

“We expect Indian markets to remain volatile on the back of concerns over higher interest rates, ongoing Israel-Hamas war and mixed Q2 results. On the global front, investors will take cues from ECB interest rate decision on Thursday,” said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Here are key global market cues for Sensex today:

Asian Markets

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

Japan’s Nikkei 225 fell 1.30%. South Korea’s Kospi index declined 1.51%, while the Kosdaq index dropped 2.3%. 

Hong Kong’s Hang Seng index futures stood at 17,158, compared to the HSI’s close of 17,085.33.

Australia’s S&P/ASX 200 eased 0.4%.

Gift Nifty was trading around 19,045 level as against Nifty futures’ previous close of 19,130, indicating a lower opening for the Indian benchmark indices.

Also Read: Buy or sell: Vaishali Parekh recommends three intraday trading stocks for today — October 26

Wall Street

US stocks ended lower amid a broad sell-off on Wednesday dragged by rising Treasury yields and disappointing set of corporate earnings.

The Dow Jones Industrial Average fell 105.45 points, or 0.32%, to 33,035.93, while the S&P 500 declined 60.91 points, or 1.43%, to 4,186.77. The Nasdaq Composite ended 318.65 points, or 2.43%, lower at 12,821.22, registering its biggest single-session percentage drop since February 21.

Among stocks, Alphabet shares plunged after the company reported disappointing cloud services revenue, while Microsoft shares gained 3.1% following its better than expected quarterly report.

Old Dominion Freight Line shares fell 3.9% after the trucking firm posted earnings, while defense contractor General Dynamics rose 4.0% after reporting a jump in third-quarter revenue.

Shares of IBM and Meta Platforms rose in extended trading after the companies posted stronger than expected earnings.

Also Read: Global markets today: Wall Street falls on higher bond yields, European equities end flat

Meta beats revenue, profit estimates in Q3

Meta Platforms, the owner of social media platforms Facebook and Instagram, beat expectations for third-quarter profit and revenue on Wednesday led by a recovery in digital advertising spending.

Meta, which also owns WhatsApp, reported a 23% rise in revenue to $34.15 billion for the quarter ended September, growing at the quickest pace in two years. Analysts expected revenue of $33.56 billion, according to LSEG data. 

The company’s earnings per share increased to $4.39, compared with $1.64 in the prior year. Meta's operating margin in the third quarter doubled to 40%.

The company forecast fourth quarter revenue between $36.5 billion and $40 billion, in line with analyst expectations.

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China smartphone shipments fall 5% YoY in Q3

Smartphone shipments in China fell 5% year-on-year in the third quarter to 66.7 million handsets, research firm Canalys reported. 

The Honor smartphone brand took first place by sales, while Huawei's market share rose, reaching that of leading manufacturers due to its new Mate 60 products, Reuters reported, quoting Canalys.

US new home sales scale 19-month high

Sales of new US single-family homes surged to a 19-month high in September as the annual median house price dropped by the most since 2009, Reuters reported.

New home sales rebounded 12.3% to a seasonally adjusted annual rate of 759,000 units last month, the highest level since February 2022. August's sales pace was revised up to 676,000 units from the previously reported 675,000 units.

Economists polled by Reuters had forecast new home sales, which account for a small share of US home sales, rebounding to a rate of 680,000 units. Sales accelerated 33.9% on a year-on-year basis in September.

Q2 Results

Two major Indian companies, Tech Mahindra and Axis Bank reported their financial results for the second quarter of FY24 on Wednesday. 

Tech Mahindra, the last of the six large-cap companies in the domestic information technology (IT) services industry, posted a staggering 62% drop in net profit in the September quarter, rounding off what was one of the worst quarters for this industry in the past five years, barring the covid-disrupted period.

Its revenues for the period were at $1.55 billion, down 2.8% sequentially in constant currency terms, while net profit fell 29.3% sequentially, and a whopping 62.5% from a year earlier to $59.5 million.

Axis Bank reported a net profit of 5,863 crore in Q2FY24 registering a 10% growth from 5,329.8 crore in the corresponding quarter of last year. Net interest income (NII), which is the difference between interest earned and interest expended, during Q2FY24 rose 18.9% to 12,314.56 crore from 10,360.26 crore, YoY. 

(With inputs from Reuters)

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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First Published:26 Oct 2023, 07:45 AM IST
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