Indian Stock Market: 8 Key Things That Changed Over the Weekend

The Indian stock market is expected to open on a cautious note on Monday, following mixed cues from global peers. The Sensex and Nifty 50 indices are likely to track the global market’s performance, which was marked by a rally in megacap tech stocks in the US.

The US job market data released over the weekend showed a slowdown in job growth in June, with the unemployment rate rising to a 2.5-year high. This has sparked debate among analysts about the possibility of interest rate cuts by the US Federal Reserve later this month. According to the CME’s FedWatch Tool, traders are currently expecting two rate cuts in 2024, with the first one in September.

In India, the stock market ended mixed on Friday, with the Sensex dropping 53.07 points to close at 79,996.60, while the Nifty 50 settled 21.70 points higher at 24,323.85. Analysts expect the market to consolidate at a higher level after a 7% run-up in the last month. This week, investors will be looking out for Q1FY25 earnings, inflation data, and other key global cues that will drive market movement.

Market participants will also be eyeing Union Budget-related announcements, government policy decisions, corporate announcements, foreign fund flows, crude oil prices, and domestic and global macroeconomic data. These factors will play a crucial role in determining the market’s direction this week.

Global Market Cues

Asian markets traded mixed on Monday, with Japan’s Nikkei 225 and Topix declining, while South Korea’s Kospi and Kosdaq rose. Hong Kong’s Hang Seng index futures indicated a lower opening. The Gift Nifty was trading around 24,386, indicating a flat start for the Indian stock market indices.

In the US, the stock market closed higher on Friday, with the tech-heavy Nasdaq and benchmark S&P 500 hitting record highs. The Dow Jones Industrial Average gained 67.87 points to close at 39,375.87, while the S&P 500 rallied 30.17 points to 5,567.19. The Nasdaq Composite ended 164.46 points higher at 18,352.76.

Megacap stocks such as Microsoft and Meta Platforms hit record highs, while banking stocks like Bank of America, Wells Fargo, and JPMorgan & Chase declined. The S&P 500 gained 1.95% for the week, the Nasdaq rose 3.5%, and the Dow climbed 0.66%.

US Nonfarm Payrolls

The US employment report showed a solid increase in jobs in June, but the unemployment rate rose to a 2.5-year high of 4.1%. The economy created 111,000 fewer jobs in April and May than previously estimated. Nonfarm payrolls increased by 206,000 jobs last month, lifted by government hiring. Economists had forecast payrolls would increase by 190,000 last month.

Oil Prices

Crude oil prices traded mixed ahead of reports from OPEC and the IEA this week. Brent crude futures fell 0.14% to $86.42 a barrel, while West Texas Intermediate (WTI) crude futures prices declined 0.30% to $82.91 a barrel.

Other Key Developments

Japan’s inflation-adjusted real wages fell for a record 26th straight month, while China’s Central Bank will carry out temporary bond repurchase or reverse repurchase operations depending on market conditions. The dollar index was up 0.12% to 105.00, while US Treasury 10-year yields fell eight basis points to 4.28%.

Historical Context:

The Indian stock market has been experiencing a significant run-up in recent months, with the Sensex and Nifty 50 indices rising by 7% in the last month. This has led to expectations of consolidation at a higher level, with investors looking for cues from global markets and domestic economic data to determine the market’s direction. The US Federal Reserve’s interest rate decisions have been a key factor in global market movements, with traders expecting two rate cuts in 2024. The Indian government’s Union Budget and policy decisions are also expected to have an impact on the market.

Key Points:

• The Indian stock market is expected to open cautiously on Monday, tracking global market performance. • The Sensex and Nifty 50 indices are likely to consolidate at a higher level after a 7% run-up in the last month. • The US job market data showed a slowdown in job growth in June, with the unemployment rate rising to a 2.5-year high. • Traders are expecting two rate cuts by the US Federal Reserve in 2024, with the first one in September. • The Indian market will be driven by Q1FY25 earnings, inflation data, and global cues this week. • Market participants will be eyeing Union Budget-related announcements, government policy decisions, corporate announcements, foreign fund flows, crude oil prices, and domestic and global macroeconomic data. • Asian markets traded mixed on Monday, with Japan’s Nikkei 225 and Topix declining, while South Korea’s Kospi and Kosdaq rose. • The US stock market closed higher on Friday, with the tech-heavy Nasdaq and benchmark S&P 500 hitting record highs. • Megacap stocks such as Microsoft and Meta Platforms hit record highs, while banking stocks like Bank of America, Wells Fargo, and JPMorgan & Chase declined. • Crude oil prices traded mixed ahead of reports from OPEC and the IEA this week. • Japan’s inflation-adjusted real wages fell for a record 26th straight month. • China’s Central Bank will carry out temporary bond repurchase or reverse repurchase operations depending on market conditions. • The dollar index was up 0.12% to 105.00, while US Treasury 10-year yields fell eight basis points to 4.28%.