The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to open on a cautious note on Thursday, following weakness in global markets, amid the latest escalation of the US-Iran war in the Middle East and rising crude oil prices, stoking fears of elevated inflation.
Asian markets slipped, while the US stock market ended lower, weighed down by a sharp fall in the shares of chipmakers.
On Wednesday, the Indian stock market ended mixed, with the benchmark indices closing significantly off the day’s high.
The Sensex rose 64.42 points, or 0.09%, to close at 73,983.18, while the Nifty 50 settled 27.15 points, or 0.12%, lower at 23,214.95.
“We believe lingering geopolitical tensions and persistent foreign fund outflows are keeping market participants cautious, and a meaningful relief rally may remain elusive in the near term. In this environment, traders should align their positions accordingly, preferring pharma, healthcare, and banking stocks on the long side, while maintaining selective short positions in weaker pockets as a hedge against overnight risk,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.
Here are key global market cues for Sensex today:
Asian Markets
Asian markets traded lower on Thursday after the latest attacks by the US on Iran sent crude oil prices higher, denting investor sentiment. Japan’s Nikkei 225 declined 2.3% and the Topix fell 1.9%. South Korea’s Kospi tanked 4.1%, while the Kosdaq plunged 2.8%. Hong Kong Hang Seng index futures indicated a lower opening.
Gift Nifty Today
Gift Nifty was trading around 23,198 level, a discount of nearly 42 points from the Nifty futures’ previous close, indicating a negative start for the Indian stock market indices.
Wall Street
US stock market ended sharply lower on Wednesday, as renewed tensions between the US and Iran added to investor uncertainty, while chipmaker shares extended recent declines.
The Dow Jones Industrial Average plunged 953.33 points, or 1.87%, to 49,918.78, while the S&P 500 dropped 119.66 points, or 1.62%, to 7,266.99. The Nasdaq Composite closed 509.32 points, or 1.98%, lower at 25,169.50.
Nvidia stock price declined 3.73%, AMD shares tanked 4.86%, Broadcom share price slipped 5.12%, Microsoft shares fell 1.50%, Apple stock price rose 0.35%, Amazon shares shed 2.53%, Meta share price dropped 2.33%, Alphabet shares fell 2.48%, and Tesla stock price declined 3.80%.
US-Iran War
The United States launched a new wave of attacks against Iran, and Tehran hit back saying it will target any ship going through the Strait of Hormuz. Iranian media reported explosions across the country’s south near the Strait of Hormuz, the same area where US forces had already bombarded air defense, radar and other sites on Tuesday.
US Inflation
US consumer inflation increased at its fastest pace in three years in May. The Consumer Price Index increased 4.2% in the 12 months through May, the largest gain since April 2023. The CPI advanced 3.8% YoY in April and rose 3.3% in March. Prices increased 0.5% over the month after climbing 0.6% in April.
Oracle Earnings
Oracle reported total revenue of $19.18 billion for the fourth quarter, compared with analysts’ average estimate of $19.10 billion, according to data compiled by LSEG. Its adjusted profit of $2.03 per share for the quarter exceeded expectations of $1.96.
The company forecast capital spending plans for fiscal 2027 above Wall Street estimates, as the cloud computing company said it will also raise more debt in 2027, Reuters reported. It expects to raise nearly $40 billion through a combination of debt and equity financing in 2027. Oracle stock price shares fell 10.12% in extended trading.
Treasury Yields
US Treasury yields rose after inflation remained higher. The yield on benchmark US 10-year notes rose 2 bps to 4.548%. The 30-year bond yield rose 1.7 bps to 5.0282%. The 2-year note yield rose 1.5 bps to 4.139%.
Japanese government bond (JGB) yields also climbed on inflation concerns. The benchmark 10-year JGB yield rose 1 bp to 2.690%. The 30-year yield added 2 bps to 3.870%.
Crude Oil Prices
Crude oil prices rallied as Iran declared the Strait of Hormuz closed after the US launched additional strikes against Iran. Brent futures jumped 2.47% to $95.40 a barrel, while US West Texas Intermediate (WTI) crude gained 2.89% to $92.63 a barrel.
Gold Rate Today
Gold prices hit a more than six-month low, amid concerns around inflation and higher-for-longer interest rates, Reuters reported. Spot gold price fell 0.2% to $4,063.87 per ounce, after hitting its lowest level since November 21 earlier in the day. US gold futures for August delivery declined 1.1% to $4,086.50. Spot silver price fell 0.9% to $63.15 per ounce.
Dollar
The US dollar was steady after the inflation data which was in line with expectations. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was near flat at 100.01, with the euro down 0.03% at $1.1539. Against the Japanese yen, the dollar strengthened 0.1% to 160.52.
(With inputs from Agencies)