Indian stock market benchmarks Sensex and Nifty 50 are poised for a flat-to-positive opening on Tuesday, mirroring the upbeat sentiment in global markets and ending their recent losing streak.
Market Performance and Recovery
On Monday, the Indian equity market staged a remarkable recovery, breaking its three-day declining trend with significant gains in key index heavyweights. The Sensex jumped 319.07 points, or 0.38%, to close at 83,535.35, while the Nifty 50 climbed 82.05 points, or 0.32%, settling at 25,574.35.
Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, commented: "We expect markets to remain range-bound tracking global cues, while optimism around better than expected corporate earnings and any progress in India–US trade talks could provide upside support."
Global Market Influence
Asian markets displayed strong performance on Tuesday, following substantial overnight gains on Wall Street. Japan's Nikkei 225 advanced 1.06%, while the Topix index rose 0.52%. South Korea's Kospi index surged impressively by 2.72%, with Kosdaq gaining 1.38%.
The Gift Nifty was trading around the 25,709 level, indicating a premium of nearly 15 points from the Nifty futures' previous close, suggesting a cautiously optimistic start for Indian indices.
Wall Street Rally and Sector Performance
US stock markets ended sharply higher on Monday, driven by substantial gains in heavyweight AI-related stocks and growing optimism about resolving the government shutdown. The Dow Jones Industrial Average gained 0.81% to 47,368.63, while the S&P 500 rallied 1.54% to 6,832.43. The Nasdaq closed 2.27% higher at 23,527.17, marking its most significant one-day percentage gain since May 27.
Technology stocks led the charge with Nvidia surging 5.8%, Palantir shares jumping 8.8%, and AMD gaining 4.47%. Other major tech players including Amazon rising 1.63% and Microsoft advancing 1.85% contributed to the bullish sentiment.
Key Economic Developments
In significant trade developments, US President Donald Trump indicated that the United States was "pretty close" to finalizing a trade deal with India. He mentioned potentially reducing tariff rates on Indian goods, stating, "We're getting a fair deal" that would benefit both nations.
Meanwhile, US Federal Reserve Governor Stephen Miran suggested that better-than-expected inflation data and continued weakness in the job market warrant a third consecutive interest-rate cut in December. He emphasized that a half-point cut next month remains "appropriate", with at minimum a quarter percentage point reduction.
Commodity Market Movements
Gold prices extended their gains to a near three-week high as expectations of another Fed rate cut in December boosted demand for the safe-haven asset. Spot gold price rose 0.4% to $4,131.83 per ounce, reaching its highest level since October 24.
In contrast, crude oil prices traded lower with Brent crude falling 0.19% to $63.94 a barrel and US West Texas Intermediate crude futures declining 0.23% to $60.01.
The combination of global market optimism, progress in US-India trade negotiations, and expectations of supportive monetary policy creates a favorable environment for Indian equities, though investors remain cautious about sustaining the recovery momentum.
