Global Winds and Local Shifts: What's Moving the Indian Stock Market Today?

The Indian stock market is bracing for a nuanced opening this Friday, with benchmark indices Sensex and Nifty 50 expected to trade relatively flat. This cautious start comes as global markets present a mixed bag of signals, leaving investors to weigh both headwinds and tailwinds.

While Asian markets have shown varied performance, Wall Street concluded Thursday on a high note, propelled by a surprisingly robust US jobs report. Both the S&P 500 and Nasdaq soared to unprecedented highs, injecting a dose of optimism into the global financial landscape. However, the Indian market experienced a dip yesterday, extending its losses for a second consecutive session amidst late-day selling pressure. The Sensex shed 170.22 points (0.20%) to close at 83,239.47, and the Nifty 50 finished 48.10 points (0.19%) lower at 25,405.30.

Despite the recent dip, seasoned market observers like Ajit Mishra, SVP, Research at Religare Broking Ltd., maintain a positive outlook on individual stock performance. "Individual stocks continue to offer ample opportunities, supported by rotational buying across sectors and noticeable resilience in the broader market," Mishra noted, advising participants to strategically align their positions with a strong emphasis on careful stock selection.

Let's delve into the key global market indicators influencing the Indian stock market today:

Asian Markets: A Patchwork Performance

Friday morning saw Asian markets exhibit a mixed trend, reacting to Wall Street's overnight gains. Japan's Nikkei 225 remained largely unchanged, while the Topix index eked out a 0.15% gain. In contrast, South Korea's Kospi index slipped by 0.56%, and the Kosdaq dropped 0.8%. Hong Kong's Hang Seng index futures pointed towards a lower opening, adding to the regional disparities.

Gift Nifty Signals a Mildly Positive Opening

For the Indian market, Gift Nifty was trading around the 25,526 level, commanding a premium of nearly 18 points over Nifty futures' previous close. This suggests a mildly positive start for the domestic equity indices, offering a glimmer of upward momentum.

Wall Street's Record-Breaking Run

The US stock market concluded Thursday on a high, with the S&P 500 and Nasdaq reaching all-time record highs. This surge was significantly buoyed by a surprisingly strong US jobs report that cheered investors. The Dow Jones Industrial Average rallied 344.11 points (0.77%) to 44,828.53, the S&P 500 climbed 51.94 points (0.83%) to 6,279.36, and the Nasdaq Composite closed 207.97 points (1.02%) higher at 20,601.10. For the week, the S&P 500 surged 1.72%, the Nasdaq gained 1.62%, and the Dow jumped 2.3%.

Big tech players saw notable gains, with Nvidia shares up 1.3%, Apple shares gaining 0.52%, Amazon stock adding 1.59%, and Microsoft advancing 1.58%. Beyond the tech giants, Tripadvisor shares leaped an impressive 16.7%, and Datadog stock price surged 14.9%, highlighting broader market strength.

"One Big Beautiful Bill" Passed in the US

In a significant legislative development, Republicans in the US House of Representatives successfully passed President Donald Trump’s colossal tax-cut and spending bill. The 218–214 vote marked the culmination of a marathon effort to push through the $3.4 trillion "One Big Beautiful bill." This legislation aims to make Trump’s 2017 tax cuts permanent, introduce new tax breaks, and allocate funds for his immigration crackdown. However, the nonpartisan Congressional Budget Office estimates that the bill will add a substantial $3.4 trillion to the nation’s already considerable $36.2 trillion debt.

Nvidia's Soaring Valuation

Nvidia's share price continues its meteoric rise, hitting an all-time high and pushing its market capitalization tantalizingly close to the $4 trillion mark. This positions the chipmaker as a contender for the world’s most valuable company. Although it ended the day up 1.33% at $159.34 with a market value of $3.89 trillion, Nvidia currently stands ahead of both Apple and Microsoft in terms of market capitalization, underscoring its dominant position in the tech sector.

Robust US Nonfarm Payrolls Surprise

The US job market demonstrated unexpected strength in June, with nonfarm payrolls increasing by 147,000 jobs. This figure followed an upwardly revised 144,000 gain in May, surpassing Reuters' economist poll forecast of 110,000 jobs. This solid employment data is a key driver behind the recent optimism in US markets.

US Unemployment Rate Dips

Adding to the positive employment picture, the Labor Department's closely watched report revealed a dip in the unemployment rate to 4.1% last month, down from 4.2% in May. This decline was partly attributed to some individuals leaving the labor force.

US Jobless Claims at Six-Week Low

Further reinforcing the healthy labor market, the number of Americans filing new applications for jobless benefits fell to a six-week low last week. Initial claims for state unemployment benefits dropped by 4,000 to a seasonally adjusted 233,000 for the week ended June 28 – the lowest since mid-May. This figure was also lower than economists' forecast of 240,000 claims.

US Dollar Holds Steady

The dollar held onto its gains on Friday. Against the yen, the dollar traded at 144.69 yen, down a slight 0.2% from late in the US trading day when it surged 0.8%. The euro added 0.1% to $1.1769, while sterling traded at $1.3668, up 0.1%.

Gold Prices Steady, Poised for Weekly Gain

Gold prices remained steady on Friday, set to achieve a weekly gain. Spot gold price was flat at $3,328.36 per ounce, with bullion up 1.7% this week. US gold futures edged down a marginal 0.1% to $3,337.90.