Indian Markets Set for Positive Opening Amid Global Optimism
Indian equity markets are positioned for a strong start to the trading week, mirroring gains across Asian markets as expectations intensify for a December interest rate cut by the U.S. Federal Reserve. Both benchmark indexes, the Nifty 50 and Sensex, are approaching their record highs achieved in September 2024, trading less than 1% below these peak levels.
Key Market Indicators and Global Cues
The Gift Nifty futures were trading at 26,159 as of 07:40 a.m. IST on Monday, signaling that the Nifty 50 could open higher than Friday's closing figure of 26,068.15. This positive momentum follows two consecutive weeks of gains for both major indexes, supported by improving corporate earnings outlook and stable investment flows.
Across Asia, markets opened strongly with the MSCI Asia ex-Japan index rising 0.8%. The bullish sentiment stems from recent comments by New York Fed President John Williams, who indicated that the U.S. central bank could still implement interest rate reductions in the near future.
Investor Activity and Market Fundamentals
The probability of a U.S. rate cut in December has surged dramatically to 70% from just 44% a week ago, according to the CME FedWatch Tool. Lower interest rates in the United States typically enhance the appeal of emerging markets like India for foreign investors seeking higher returns.
Investment patterns showed mixed activity on Friday, with domestic institutional investors (DIIs) purchasing Indian stocks worth 31.62 billion rupees, while foreign portfolio investors (FPIs) sold shares valued at 17.66 billion rupees, according to provisional data from the National Stock Exchange.
Market analysts attribute the sustained strength in Indian equities to multiple factors including strong quarterly earnings, easing inflation pressures, and reduced foreign selling activity. The growing optimism surrounding India-U.S. trade negotiations has further bolstered market sentiment, potentially driving shares to new record levels in the coming sessions.
Stocks to Watch
Tata Power has signed a significant agreement with Druk Green Power Corporation for a 131 billion-rupee hydroelectric power project in Bhutan. The company plans to infuse 15.72 billion rupees in tranches to support this ambitious energy initiative.
In pharmaceutical developments, Natco Pharma received seven Form-483 observations from the U.S. drug regulatory authority following the closure of inspection at its manufacturing facility in Chennai.
Infrastructure company HG Infra Engineering, in partnership with Kalpataru Projects, has emerged as the lowest bidder for a substantial 14.15 billion rupee metro construction project in Mumbai, marking a significant contract win in the urban infrastructure sector.
