Global Currents and Domestic Cues: What's Steering India's Stock Market Today?

The Indian stock market is poised for a nuanced opening on Thursday. After a mixed performance from global counterparts, both the Sensex and Nifty 50 are expected to begin the day on a relatively flat note. Investors will be keenly watching how the interplay of international developments and domestic sentiment unfolds.

A Look Back: Wednesday's Close

Wednesday saw Indian equities conclude the trading session in the red, primarily due to a sell-off in select heavyweight stocks. The Sensex shed 287.60 points (0.34%) to close at 83,409.69, while the Nifty 50 dipped 88.40 points (0.35%) to settle at 25,453.40.

Expert Insight:

"While global markets continue to display strength, the recent pause in Nifty 50 reflects caution, as participants await fresh triggers to resume the uptrend," noted Ajit Mishra, SVP, Research at Religare Broking Ltd. He advises investors to "maintain a positive bias while focusing on stock selection, especially in sectors showing relative outperformance, with an eye on the risk-to-reward ratio." This suggests a strategic approach is key in the current market climate.

Global Markets: The Overnight Picture

Several international factors are influencing today's market sentiment:

Asian Markets Trade Mixed: Asia presented a varied picture this morning. While Wall Street's overnight gains provided some uplift, investors in the region are holding their breath for details on the newly announced US-Vietnam trade agreement. Japan's Nikkei 225 and Topix saw slight declines of 0.15% and 0.21% respectively, while South Korea's Kospi and Kosdaq registered gains of 0.77% and 0.5%. Hong Kong's Hang Seng index futures indicated a lower opening.

Gift Nifty Hints at Positive Start: The Gift Nifty, a key indicator for Indian equities, was trading around the 25,567 level. This represents a premium of nearly 20 points from the Nifty futures' previous close, suggesting a mildly positive start for the Indian stock market indices.

Wall Street's Record Run Continues: Across the Atlantic, the US stock market largely ended higher on Wednesday. Both the S&P 500 and Nasdaq Composite closed at record highs, fueled by robust performances from technology stocks and the buzz around the US-Vietnam trade deal. The Dow Jones, however, saw a marginal dip of 10.52 points (0.02%) to 44,484.42. In contrast, the S&P 500 climbed 29.41 points (0.47%) to 6,227.42, and the Nasdaq Composite surged an impressive 190.24 points (0.94%) to 20,393.13.

♦ Notable movers included Tesla, which rallied 4.97%, Apple, gaining 2.22%, and Nvidia, up 2.58%. Intel, on the other hand, saw a decline of 4.25%, and Centene shares tumbled a significant 40%.

US-Vietnam Trade Deal Unveiled: US President Donald Trump announced a significant trade agreement with Vietnam. The deal slashes US tariffs on many Vietnamese goods to 20% from a previously threatened 46%, while US products are now set to enter Vietnam duty-free. This development is expected to have broad economic implications.

Surprising US Private Payrolls Decline: The US private sector witnessed its first drop in payrolls in over two years in June. The ADP National Employment Report indicated a decline of 33,000 jobs last month, marking the first such decrease since March 2023. This stands in stark contrast to economists' forecasts, who had predicted an increase of 95,000 jobs.

Japan's Services Sector Expands: Japan's service sector activity saw a modest acceleration in June, with business confidence reaching a four-month high, as reported by Reuters. The au Jibun Bank Japan Services purchasing managers’ index (PMI) rose to 51.7 in June from 51.0 in May, surpassing the flash figure and indicating a third consecutive month of growth.

Crude Oil Prices Ease: Crude oil prices experienced a slight dip amidst concerns of weak US demand, following government data that revealed an unexpected build in inventories. Brent crude futures fell 0.35% to $68.87 a barrel, and US West Texas Intermediate crude declined 0.36% to $67.21 a barrel.

Gold Prices Decline: Gold prices also moved lower after the US-Vietnam trade deal helped ease broader market tensions. Spot gold price fell 0.3% to $3,345.57 per ounce, with US gold futures dropping 0.1% to $3,356.60.

Key Takeaway for Investors:

As the Indian market opens today, a close watch on these global cues will be paramount. While domestic factors always play a role, the international landscape, from trade agreements to economic data, will heavily influence market movements and present both opportunities and challenges for investors.