GIFT Nifty points to lower opening

GIFT Nifty:

GIFT Nifty futures for September is trading 19 points lower, indicating a negative start for the Nifty 50.

Foreign portfolio investors (FPIs) bought shares worth Rs 1,944.48 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 2,896.02 crore in the Indian equity market on 23 August 2024, provisional data showed.

FPIs have sold shares worth over Rs 30585.80 crore in August 2024 (so far). They bought shares worth 5407.83 crore in July 2024.

Global Markets:

Asian markets were mixed on Monday, with some finding support from the anticipation of lower U.S. interest rates. However, Japanese markets retreated amidst pressure from the yen and speculation about potential rate hikes by the Bank of Japan. The upcoming Tokyo inflation data is expected to provide more clarity on the trajectory of Japanese interest rates.

 

Sentiment was also influenced by the People's Bank of China's withdrawal of approximately 101 billion yuan ($14.2 billion) from the open market. While this move aimed to strengthen the yuan, it also raised concerns about the extent of Beijing's support for the Chinese economy.

Regional markets drew initial strength from the positive performance of Wall Street, where the S&P 500 and Dow Jones Industrial Average approached record highs on Friday. Federal Reserve Chair Jerome Powell's comments reinforced expectations for a rate cut in September, with Powell stating that "the time has come" for a monetary policy adjustment.

In his speech at the Jackson Hole Economic Symposium on Friday, Powell highlighted the factors contributing to recent inflation, including increased demand for goods, supply chain disruptions, tight labor markets, and rising commodity prices. He also clarified that the recent rise in the unemployment rate is primarily due to increased labor supply and slower hiring, rather than widespread layoffs.

The S&P 500 gained 1.2%, the Dow Jones Industrial Average rose 1.1%, and the NASDAQ Composite surged 1.5%.

However, caution prevailed ahead of a series of crucial events this week. The most anticipated is the earnings report from NVIDIA Corporation, a market darling, which is due after the market closes on Wednesday. Additionally, the PCE price index data, the Fed's preferred inflation gauge, is scheduled for later in the week.

Domestic Market:

The domestic equity benchmarks closed almost flat on Friday, awaiting clues on interest rate cuts from US Fed Chair Powell's speech at Jackson Hole. Investors are cautious about the timing, size and pace of these cuts. The Nifty50 held the 24,800 level. Realty, media and IT stocks fell the most, while Nifty Auto bucked the trend. The barometer index, the S&P BSE Sensex, rose 33.02 points or 0.04% to 81,086.21. The Nifty 50 index added 11.65 points or 0.05% to 24,823.15.

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