Indian stock market: 8 key things that changed for market over weekend - Gift Nifty, US nonfarm payrolls to Japan’s GDP

Indian stock market: The domestic equity market indices, Sensex and Nifty 50, are expected to open lower on Monday, extending the losses from a steep fall last week, following weakness in global markets.

Asian markets traded in the red, while the US stock market ended sharply lower last week after the employment data soured investor sentiment.

Traders will be watching for the August US Consumer Price Index (CPI) due on Wednesday, followed by Producer Price Index (PPI) on Thursday.

Fed funds futures traders are now pricing a 71% chance of a 25 basis point cut at the US Federal Reserve’s next policy meeting, and a 29% chance of a 50 bps reduction, according to the CME FedWatch Tool.

On Friday, the Indian stock market indices ended sharply lower dragged by selling across the board amid negative global cues.

The Sensex crashed 1,017.23 points, or 1.24%, to close at 81,183.93, while the Nifty 50 settled 292.95 points, or 1.17%, lower at 24,852.15.

“We expect consolidation mode to continue in the market over the near term. However, with the start of the festive season sectors like consumer discretionary, retail, hotel, and jewellery would remain in focus,” said Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd.

This week, investors will closely monitor key triggers such as domestic and global macroeconomic data, including inflation data in India and the US, trends in flow of foreign funds, crude oil prices, and other key global market cues.

Here are key global market cues for Sensex today:

Asian Markets

Asian markets traded lower on Monday, with Japan’s Nikkei 225 leading losses in the region.

Nikkei plunged 3.02%, dropping below the psychologically key 36,000 mark for the first time since August 13, while the Topix declined 2.84%. South Korea’s Kospi dropped 1.99% and the Kosdaq fell 1.72%. Hong Kong Hang Seng index futures indicated a lower opening.

Gift Nifty Today

Gift Nifty was trading around 24,832 level, a discount of nearly 80 points from the Nifty futures’ previous close, indicating a negative start for the Indian stock market indices.

Wall Street

US stocks ended lower on Friday after the jobs report showed a continued labor market slowdown. The S&P 500 and the Dow had their biggest weekly drop since March 2023, with the Nasdaq registering its biggest weekly fall since January 2022.

The Dow Jones Industrial Average declined 410.34 points, or 1.01%, to 40,345.41, while the S&P 500 dropped 94.99 points, or 1.73%, to 5,408.42. The Nasdaq Composite ended 436.83 points, or 2.55%, lower at 16,690.83.

Nvidia stock price fell 4%, Tesla shares slumped 8.4%, Alphabet stock declined 4%, Amazon shed 3.7%, Meta dropped 3.2%, Microsoft fell 1.6%, and Apple stock price eased 0.70%.

Broadcom shares sank 10.4%, Marvell Technology stock price declined 5.3% and Advanced Micro Devices share price dropped 3.7%. Super Micro Computer shares dropped 6.8%.

US Nonfarm Payrolls

US employment increased less than expected in August, but a drop in the jobless rate to 4.2% suggested an orderly labor market slowdown continued. Nonfarm payrolls increased by 142,000 jobs last month after a downwardly revised 89,000 rise in July. Economists polled by Reuters had forecast payrolls increasing by 160,000 jobs after a previously reported 114,000 gain in July.

US Federal Reserve

US Federal Reserve policymakers signaled they are ready to begin interest rate cuts at the US central bank’s upcoming meeting on September 17-18, Reuters reported.

Fed Governor Christopher Waller said he could support back-to-back cuts, or bigger cuts, if the data suggests the need. Chicago Fed President Austan Goolsbee also said he wants to calibrate policy based on data as it comes in.

China Inflation

China’s consumer prices rose at a faster rate in August, while producer price deflation persisted. The consumer price index (CPI) grew 0.6% from a year earlier last month, versus a 0.5% rise in July, below a 0.7% increase forecast in a Reuters poll of economists.

China’s producer price index (PPI) slid 1.8% in August on year as against a 0.8% decline the previous month, and below a forecast 1.4% fall.

Japan GDP Growth

Japan’s economy expanded in the second quarter at a pace slightly slower than the government’s initial estimate. Japan’s gross domestic product (GDP) grew at an annualized pace of 2.9% in the three months through June compared with the previous quarter and as against a preliminary estimate of 3.1%

Gold Rate Today

Gold prices remained steady on Monday and were trading slightly below the key $2,500 an ounce level. Spot gold was nearly unchanged at $2,497.53 per ounce, while the US gold futures rose 0.1% to $2,526.40.

(With inputs from Reuters)

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