Indian equity benchmarks Sensex and Nifty 50 are positioned for a positive opening on Wednesday, mirroring upbeat global market sentiment and reinforced by strong indications from Gift Nifty trading.
Global Market Rally Fuels Optimism
Asian markets displayed strong performance during early trading hours. Japan's Nikkei 225 index surged by 1.5%, while the Topix index advanced 0.9%. South Korea's Kospi gained 1.08%, and the Kosdaq added 0.64%. This upward trend follows a significant rally on Wall Street overnight, driven by growing expectations of an interest rate cut from the US Federal Reserve.
The Gift Nifty, a key early indicator for the Indian market, was trading around the 26,149 level. This represents a premium of nearly 93 points from the Nifty futures' previous close, strongly suggesting a gap-up opening for domestic indices.
Domestic Market Context and Analyst Views
This anticipated rebound comes after a period of decline. On Tuesday, the domestic market extended its losses for the third consecutive session. The Sensex dropped 313.70 points, or 0.37%, to close at 84,587.01. Similarly, the Nifty 50 settled 74.70 points, or 0.29%, lower at 25,884.80.
Commenting on the previous session's performance, Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, highlighted several cautionary factors. "Persistent outflows, caution ahead of the US Federal Reserve meeting next month, and uncertainty around progress on a potential US–India trade deal is likely to keep traders guarded," he stated.
Key International Developments and Data
In the United States, stock markets ended sharply higher. The Dow Jones Industrial Average rallied 664.18 points, or 1.43%, to 47,112.45. The S&P 500 gained 60.77 points, or 0.91%, and the Nasdaq Composite closed 153.59 points, or 0.67%, higher.
On the economic data front, US wholesale inflation rose in September. The producer price index increased by 0.3% from the previous month. However, US retail sales growth in September was slower than anticipated, rising only 0.2%. Additionally, US consumer confidence dipped in November, with the index falling to 88.7.
In international relations, India and the European Union reaffirmed their goal to conclude Free Trade Agreement (FTA) negotiations by the end of this year. Meanwhile, Ukraine has supported the essence of a peace framework following talks with the US.
Driven by optimism over a potential Fed rate cut, gold prices also traded higher, with spot gold rising 0.2% to $4,136.59 per ounce.
