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The Indian stock market is poised for a relatively uneventful opening on August 14th, as indicated by the performance of the GIFT Nifty. The GIFT Nifty, a derivative instrument that provides an early indication of the direction of the Indian market, was trading flat, hovering around 24,686.50 earlier in the morning. This suggests that the benchmark indices, Sensex and Nifty, are unlikely to experience any significant upward or downward movement at the start of trading. Yesterday's trading session saw the Indian market close higher, effectively reversing the losses incurred in the previous session. The Nifty managed to close above the crucial 24,600 level, driven by widespread buying activity across various sectors. Specifically, the Sensex gained 304.32 points, or 0.38 percent, to close at 80,539.91, while the Nifty rose 131.95 points, or 0.54 percent, to finish at 24,619.35. The broader market also participated in the rally, with both the BSE Midcap and Smallcap indices increasing by 0.5 percent each. Looking at the overnight performance of financial markets across the globe, a mixed picture emerges. Asian markets were generally trading lower in early trade, with the Nikkei in Japan experiencing a decline of nearly 1 percent. In contrast, US equities performed well, with both the S&P 500 and the Nasdaq Composite Index achieving record highs for the second consecutive session. The Dow Jones Industrial Average also finished stronger. Examining specific percentage gains, the Dow gained 1%, the S&P 500 rose 0.32%, and the Nasdaq Composite added 0.14%. In the bond market, yields on 10-year and 2-year Treasuries were trading with marginal losses in the early trade on Thursday. The dollar weakened, languishing near multi-week lows against the euro and sterling, as traders increased their bets on the Federal Reserve resuming interest rate cuts as early as next month. Most Asian currencies, with the exception of the South Korean Won, were trading higher against the US dollar in early Thursday trade. The Japanese Yen and the Indonesian Rupiah led the gainers. Oil prices edged higher on Thursday, recovering from a sell-off in the previous session. The upcoming meeting between U.S. President Donald Trump and his Russian counterpart Vladimir Putin is raising risk premiums in the market. Gold prices rose for a third consecutive day, driven by increased bets on Federal Reserve interest-rate cuts following Treasury Secretary Scott Bessent's call for the US central bank to lower borrowing costs. The foreign institutional investors (FIIs) continued their selling spree for the third consecutive session on August 13, offloading equities worth Rs 3,644 crore. However, domestic institutional investors (DIIs) continued their buying activity, purchasing equities worth Rs 5,623 crore on the same day. This counterbalancing action by DIIs helped to cushion the impact of FII selling on the Indian market.
Analyzing the global cues in more detail, the weakness in Asian markets could be attributed to a variety of factors, including concerns about economic growth, trade tensions, and geopolitical risks. The decline in the Nikkei, for example, may reflect concerns about the Japanese economy's ability to sustain its recovery. The strength in US equities, on the other hand, likely reflects continued optimism about the US economy and corporate earnings. The S&P 500 and the Nasdaq Composite Index have been on a strong upward trajectory in recent months, driven by strong performance from technology companies and a generally favorable economic outlook. The decline in US Treasury yields suggests that investors are becoming more risk-averse and are seeking the safety of government bonds. The weakness in the US dollar reflects the market's expectation that the Federal Reserve will soon begin to cut interest rates. A weaker dollar can be beneficial for US exporters, as it makes their products more competitive in global markets. The strength in Asian currencies reflects a combination of factors, including the weakness in the US dollar and improved economic prospects in some Asian countries. The rise in oil prices is likely due to concerns about supply disruptions, particularly in light of the upcoming meeting between President Trump and President Putin. The rise in gold prices is a classic response to increased uncertainty and risk aversion in the market. Gold is often seen as a safe haven asset, and investors tend to flock to it during times of economic or political turmoil.
The divergence between FII and DII activity is an interesting dynamic to observe. FIIs, which are foreign investors, have been net sellers of Indian equities for the past three sessions. This could be due to a variety of factors, including concerns about the Indian economy, global market volatility, or a reallocation of assets to other markets. DIIs, which are domestic investors, have been net buyers of Indian equities during the same period. This suggests that domestic investors have more confidence in the Indian market than foreign investors. The counterbalancing action of DIIs has helped to support the Indian market and prevent it from falling further in response to FII selling. The article concludes with a disclaimer, reminding readers that the views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to consult with certified experts before making any investment decisions. This disclaimer is important because it highlights the fact that investment decisions should be made based on individual circumstances and risk tolerance, and not solely on the basis of information provided by third-party sources.
Overall, the article provides a snapshot of the global market conditions as of August 14th and offers insights into the potential direction of the Indian stock market. The flat start indicated by the GIFT Nifty suggests a period of consolidation after the previous day's gains. The mixed global cues, with weakness in Asian markets offset by strength in US equities, create a complex environment for investors. The divergence between FII and DII activity highlights the different perspectives of foreign and domestic investors on the Indian market. Investors should carefully consider these factors, along with their own individual circumstances, before making any investment decisions. Monitoring key indicators such as the performance of the GIFT Nifty, movements in global equity markets, currency fluctuations, and commodity prices can provide valuable insights into the potential direction of the Indian market. Furthermore, staying informed about macroeconomic trends, policy announcements, and corporate earnings reports is crucial for making informed investment decisions. It's important to remember that investing in the stock market involves risk, and there is no guarantee of returns. Investors should be prepared to accept the possibility of losses, and should only invest money that they can afford to lose. Diversifying investments across different asset classes and sectors can help to reduce risk. Finally, seeking advice from a qualified financial advisor can provide personalized guidance and support in making investment decisions.
Source: First Tick: Here are the top global cues for today’s trade