Stock markets opened lower today, tracking weakness in Asian markets
Stock markets opened lower today, tracking weakness in Asian markets. The BSE Sensex declined by over 200 points in early trade, reaching 77,942, while the Nifty50 index was trading below the 23,650 mark.
In the broader markets, the Nifty MidCap and SmallCap indices showed little change.
Market View | Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services
So far in January FIIs have sold equity for Rs 10,419 crore. With the dollar index at 109 and the 10-year bond yield at 4.67 per cent, Foreign Institutional Investors (FIIs) are likely to continue with their selling strategy putting pressure on the market in the near-term.
With the Q3 results season starting from today there will be market reaction to results. The results of TCS will give an indication of what is in store for the IT sector. The strength of the U.S. economy and the depreciation of rupee will be tailwinds for the IT sector.
Premium segments like hotels, jewellery, and automobiles catering to the premium market and airlines are likely to report good numbers. Expectations from President Trump’s policy decisions and the Indian Union budget proposals will keep the market volatile in the coming days.
Global Cues
Asia-Pacific markets were down on Thursday, following a volatile session on Wall Street the previous day. The decline came after the release of the Federal Reserve’s meeting minutes, which indicated that interest rates may remain high for a longer period due to persistent inflation.
The minutes revealed concerns among Federal Reserve officials about inflation, as well as potential impacts from President-elect Donald Trump’s policies, which contributed to a more cautious approach on interest rate cuts. The report mentioned at least four times how changes in immigration and trade policies could affect the U.S. economy, though Trump was not explicitly named.
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The Federal Open Market Committee (FOMC) voted to reduce the central bank’s benchmark borrowing rate to a target range of 4.25-4.5%, but lowered its forecast for 2025 rate cuts, from four to two.
In China, consumer prices in December rose by 0.1% year-on-year, in line with expectations, but at a slower pace than the previous month, raising concerns about deflation. China’s producer price inflation fell by 2.3% year-on-year in December, marking the 27th consecutive month of decline. The low inflation indicates continued weak domestic demand, raising fears of further deflation.
As a result, major Asian indices were down: Hong Kong’s Hang Seng fell 0.2%, China’s Shanghai Composite and Australia’s ASX200 dropped 0.6% each, and Japan’s Nikkei fell by 0.8%.
On Wall Street, the S&P 500 gained 0.16%, closing at 5,918.25. The Dow added 0.25%, finishing at 42,635.20, while the Nasdaq Composite remained almost flat, closing at 19,478.88.
