Indian Stock Market Set to Open Higher: Sensex and Nifty 50 to Extend Rally
The Indian stock market is anticipated to open on a positive note, with benchmark indices Sensex and Nifty 50 expected to extend their rally. This optimism follows encouraging signals from global markets, particularly the US and Asia. In this article, we will explore the various factors influencing this upward trend and what market participants should watch for in the coming days. For the latest news and updates, visit Samaya Jyothi
Global Market Cues
Asian Markets
Asian markets traded higher on Monday, setting a positive tone for the Indian market. Japan’s Nikkei rallied 2.02%, while the Topix gained 1.52%. South Korea’s Kospi rose 0.8%, and the Kosdaq added 0.48%. However, Hong Kong Hang Seng index futures indicated a lower opening. These gains in Asian markets reflect investor optimism ahead of key central bank decisions in Japan, the US, and the UK.
US Stock Market
The US stock market ended with gains last week, fueled by rising expectations that the US Federal Reserve will soon begin cutting interest rates. On Friday, the Dow Jones Industrial Average rallied 1.64% to 40,589.34, the S&P 500 jumped 1.11% to 5,459.10, and the Nasdaq Composite Index ended 1.03% higher at 17,357.88. This positive sentiment was driven by the anticipation of monetary policy easing by the US Fed, bolstered by recent inflation data.
US Federal Reserve and Interest Rates
The meeting of the Federal Reserve’s Federal Open Markets Committee (FOMC) is scheduled for July 30 and 31, with the interest rate decision to be announced on July 31. The US inflation data released last Friday increased hopes that the US Fed would begin easing its monetary policy in September. According to CME’s FedWatch, the probability of a 25-basis-point cut at the Fed’s September meeting is about 88%. Traders also largely expect two rate cuts by December, as indicated by LSEG data.
Indian Market Performance
Last Week’s Gains
On Friday, the Indian stock market saw a significant rebound, ending a five-day losing streak and logging its best session in seven weeks. The Sensex soared 1,292.92 points, or 1.62%, to close at 81,332.72, while the Nifty 50 settled 428.75 points, or 1.76%, higher at an all-time closing high of 24,834.85. This sharp recovery was driven by heavy value-buying at lower levels and strong performance from blue-chip and mid-cap companies.
Analyst Insights
“Indian markets outperformed their global peers due to strong across-the-board buying support after languishing in negative territory for the past five trading sessions,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd. “The sharp rebound signifies that India remains a good long-term bet, and the economy continues to show strong resilience despite global uncertainty and geopolitical tensions. Additionally, better earnings reports from most blue-chip and mid-cap companies are providing a major impetus to the markets.”
Key Factors to Watch This Week
Market participants will closely monitor several factors that could influence the market’s movement this week:
- Q1 Results: Corporate earnings reports will continue to play a significant role in shaping market sentiment.
- US Fed’s Interest Rate Decision: The outcome of the FOMC meeting on July 31 will be crucial.
- Domestic and Global Macroeconomic Data: Key economic indicators from India and abroad will be watched.
- Foreign Fund Flows: The flow of foreign investments into Indian markets will be a key driver.
- Crude Oil Prices: Trends in crude oil prices, influenced by the upcoming OPEC meeting, will be significant.
Additional Market Indicators
Gift Nifty
Gift Nifty was trading around the 25,075 level, a premium of nearly 160 points from the Nifty futures’ previous close, indicating a positive start for the Indian stock market indices.
US Treasury Yields
US 10-year Treasury yields fell to a one-week low on Friday after data showed US prices rose modestly in June. Benchmark 10-year note yields fell 5.6 basis points (bps) to 4.2%, reaching as low as 4.19%, the lowest since July 19. Interest rate-sensitive two-year note yields were down 5.4 bps at 4.389%.
Oil Prices
Crude oil prices traded higher on Monday from near a six-week low ahead of the OPEC meeting later in the week. Brent crude gained 0.21% to $81.30 a barrel after falling 1.5% on Friday, while West Texas Intermediate (WTI) crude rose 0.05% to $77.20.
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