Benchmark equity indices are likely to start the week on a strong note. | Image:
Freepik
Stock Market Today: Benchmark equity indices are likely to start the week on a strong note, buoyed by weak US labour market data that strengthened expectations of a Federal Reserve rate cut, and by recent domestic tax cuts aimed at boosting consumption.
As of 8:47 am on Monday, Gift Nifty futures were trading at 24,882, pointing to a positive start for the Nifty 50, which closed at 24,741 on Friday.
Last week, the Nifty and BSE Sensex gained 1.3% and 1.1%, respectively, after the Goods and Services Tax (GST) Council cut levies on everyday essentials, giving a boost to consumer sentiment.
Global cues are also supporting markets. The MSCI Asia ex-Japan index rose 0.4% after US employment data showed that far fewer jobs were created in August than expected, fueling hopes of monetary easing.
Lower interest rates in the US typically drive capital toward emerging markets like India, enhancing their appeal for foreign investors.
What Market Expert Ajay Bagga Said?
Market expert Ajay Bagga noted, “There are plenty of global cues impacting markets today. The subdued US jobs report makes a rate cut by the Fed on September 17th a certainty. There is a growing call for a jumbo rate cut of 50 bps.”
He also pointed to political shifts in Asia. “Japan saw its 10th Prime Minister since 2000 finally bow to pressures to step down. Ishiba blamed the US trade deal and its unpopularity with the key farming and small business segments for his forced resignation.”
On currencies and equities, Bagga observed, “The yen is down while Japanese stocks are rallying.”
Turning to the US, he highlighted immigration tensions. “Korean media carried images of handcuffed and shackled Koreans being detained in the biggest US anti-immigration action at an under-construction Hyundai LG Energy battery plant in Georgia. There was domestic outrage with companies issuing travel advisories to employees to avoid non-essential US travel.”
Bagga added, “US futures are up along with Asian stocks while oil is up despite the OPEC+ announcing further production expansion over the weekend.”
FII Activity In Stock Markets
However, investor flows in India remained mixed. On Friday, Foreign Institutional Investors (FIIs) sold equities worth Rs 1,327.24 crore, while Domestic Institutional Investors (DIIs) bought shares worth Rs 1,773.59 crore, according to stock exchange data.
The 30-share Sensex closed Friday’s volatile session almost flat, slipping 7.25 points, or 0.01%, to 80,710.76. Gains in oil & gas and auto shares were offset by losses in IT and FMCG counters.