Gift Nifty signals a negative start for the Indian stock market today.
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The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to remain under pressure on Friday as a sharp jump in crude oil prices continues to weigh on investor sentiment. Global equity markets also reeled under pressure as bond yields spiked on worries over high inflation and fears of US Federal Reserve interest rate hikes.
The trends on Gift Nifty also signal a negative start for the Indian benchmark indices, Nifty 50 and Sensex, today. The Gift Nifty was trading around 23,349 level, a discount of nearly 135 points from the Nifty futures’ previous close.
“The combination of weaker global equities, surging crude oil prices and persistent geopolitical uncertainty is likely to keep the domestic market on the defensive at the open,” said Ponmudi R, CEO of Enrich Money.
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Here are five key factors to watch ahead of the opening of the Indian stock market today:
Asian Markets
Asian markets traded lower on Friday, following overnight fall on Wall Street. Japan’s Nikkei 225 plunged 2.78%, while the Topix declined 1.13%. South Korea’s Kospi slipped 2.56% and the Kosdaq shed 1.64%. Hong Kong’s Hang Seng index futures indicated a lower opening.
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Wall Street
US stock market ended lower on Thursday after producer price data and rising crude oil prices led Treasury yields higher and stoked worries over interest rate hike by the Federal Reserve.
The Dow Jones Industrial Average declined 0.60% to 52,064.10, while the S&P 500 fell 0.58% to end the session at 7,591.75. The Nasdaq closed 0.65% lower at 26,081.73.
US Inflation
US producer prices increased in August. The Producer Price Index for final demand rose 0.4% last month after an upwardly revised 0.1% gain in July. The PPI was unchanged in July. In the 12 months through August, the PPI rose 5.4% after rising 4.8% in July.
US Treasury Yields, Dollar
US treasury yields spiked and the dollar held near its highest levels of the past week, as rising crude oil prices stoked inflation risk.
The benchmark US 10-year Treasury yields jumped to close in on the 5% level, while the 30-year hit the highest since 2007. The two-year bond yields surged 12 bps overnight.
The US dollar index was steady at 99.081, after gaining 0.3% in the previous session, after higher US producer prices.
Crude Oil Prices
Crude oil prices rallied on worries over supply disruption after increasing attacks on shipping routes in the Middle East. Brent crude futures gained 0.10% to $107.74 a barrel, while the US West Texas Intermediate crude rose 0.08%, to $102.56 a barrel.
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