The domestic market is expected to be weighed down by global cues and a lack of domestic drivers, as it awaits inflation data in the US and more clues about possible rate cuts in the US.
Wednesday will see investors in the domestic market awaiting the AGM of Reliance Industries scheduled for Thursday, along with global cues such as a slew of economic data in the US and a speech by Federal Reserve member Christopher J. Waller. The speech could reveal more clues about the quantum and frequency of interest rate cuts by the US central bank.
Markets are anticipating an imminent start to the Federal Reserve’s monetary policy easing, after Chair Jerome Powell said on Friday the central bank was ready to start cutting rates.
In Asia, investors would also be interested in the readings of Japan’s Leading Composite Index, consisting of 12 economic indices, which indicates the direction of the Japanese economy in the next few months.
Oil tempreture
Meanwhile, oil prices slipped on Tuesday, as investors weighed the brewing geopolitical risks in the Middle East.
Brent futures settled down 2.3 per cent at $79.55, per barrel, while US crude fell 2.4 per cent to $75.53.
Middle East tensions, along with concerns about a potential shutdown of Libyan oil fields, had led to a surge in oil prices of more than 7 per cent over the previous three sessions. However, that rally lost steam on Tuesday, with a slight dip in prices.
Wall Street and global markets performance
A gauge of global shares climbed in choppy trading on Tuesday as investors kept a watch on the flaring turmoil in the Middle East, as well as the impending earnings from Nvidia and US inflation data.
Wall Street’s main indexes ended higher in choppy trading, with the Dow Jones Industrial Average adding 0.02 per cent to 41,250.50, the S&P 500 gaining 0.16 per cent to 5,625.80 and the Nasdaq Composite rising 0.16 per cent to 17,754.82.
European stocks finished up 0.16 per cent, following a late rally in Japan’s Nikkei index, which ended 0.47 per cent higher. MSCI’s all-country index of stocks was up 0.15 per cent at 831.24.
Gold traded above $2,500 per ounce on rate cut expectations and lingering concerns about the Middle East conflict.
How are Asian markets trading today?
Asia-Pacific markets opened lower on Wednesday, ahead of Australia’s July inflation numbers. Australia’s S&P/ASX 200 opened 0.40 per cent lower ahead of the CPI release. Japan’s Nikkei 225 was flat, while the broad-based Topix fell 0.3 per cent.
South Korea’s Kospi as well as the small-cap Kosdaq were down 0.40 per cent, while Hong Kong’s Hang Seng index futures were at 17,871, lower than the HSI’s last close of 17,874.67.
How are analysts viewing today’s (August 28) trading session?
Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services
“Nifty continued to gain strength for the 9th day in a row, but missed to achieve all time high levels by just 5 points. The index finally closed flat at 25,018 levels. Majority of the sectors ended in green, with buying seen in Financials and Pharma.
Markets are optimistic about the US Fed policy rate cut following Jerome Powell’s supportive comments and the Federal Reserve’s confidence in achieving its 2% inflation target. Further buying by FIIs over last three days added to the sentiments.
We expect this up-move to continue with Nifty likely headed towards new highs in near term supported by broader market and stock specific action.”
Vinod Nair, Head of Research, Geojit Financial Services
“The domestic market witnessed profit-booking near record highs. While the positive expectations regarding a potential rate cut by the Fed in September remain, the recent geopolitical tensions and rising crude oil prices have made investors cautious amid high valuations. IT and financial stocks continued to perform well, whereas FMCG and metal stocks saw declines. Further, the recent shift in FII stance towards the domestic market and the anticipation that the RBI will align with the Fed’s actions are expected to foster a positive outlook in the near term.”
Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd
“The trading session lacked momentum due to weak investor participation on account of Janmastami, and ended almost unchanged from its previous close. Weak US market cues and subdued Asian indices prompted local investors to book profit towards the fag-end, indicating that intraday volatility will continue amid growing geopolitical tensions and sluggish global growth.”
Rupak De, Senior Technical Analyst, LKP Securities
“The sentiment has entered an indecisive phase as the Nifty closed with a Doji pattern on the daily chart. The significant presence of both call and put option writers at the 25,000 strike price strengthens the technical setup. As a result, the Nifty is likely to remain range-bound or might experience a slight dip in the near term. On the lower end, 24,800 could act as immediate support, while a rise above 25,100 might push the Nifty towards 25,300.”
Vinay Rajani, CMT, Senior Technical and Derivative Analyst, HDFC securities
“Nifty rose for the ninth consecutive session with minor gains. Nifty smallcap index hit fresh all time high and closed with strong wicket. Trend of the Nifty is bullish and long positions should be held with 24,875 stoploss on closing basis. On the higher side, 25,078, 25,300 and 25,500 are the next resistances.”
FII, DII update: How much did FIIs, and DIIs buy or sell on August 27?
As per data from the NSE, Foreign Institutional Investors (FII) were net buyers of Indian equities worth Rs 1,503.76 crore, while DII’s were net sellers of equities worth Rs 604.02 crore.
IPO watch: Premier Energies, Paramatrix Technologies, Indian Phosphate, Jay Bee Laminations, and Resourceful Automobile. ECOS Mobility and Aeron Composite open today
Main Board IPO:
The initial public offer (IPO) of ECOS Mobility will open for subscription today. The issue is an offer for sale of 1.8 crore shares, with an aim to raise Rs 601.20 crore.
NSE, BSE SME IPOs:
Aeron Composite will will open for subscription today on NSE SMEs. The issue comprises of a fresh issue of shares worth Rs 56.10 crore.
Here’s how the Indian benchmark performed on Monday:
The benchmark indices Sensex and Nifty closed on a subdued note on Tuesday, after the 50-stock Nifty 50 retreated from near its all-time high. The Nifty ended 0.03 per cent higher, while the Sensex closed higher by 0.02 per cent.
Among Sectors, the media index climbed over 4 per cent, while the financial services index was up 1.48 per cent at closing bell.
In contrast, the FMCG index closed 1.06 per cent lower, followed by consumer durable, metal and auuto indices.
The bank index closed in the green.
