Indian Stock Market Poised for Positive Start Amid Global Optimism
The Indian stock market benchmark indices, Sensex and Nifty 50, are anticipated to open higher on Thursday, driven by encouraging global market signals. This optimistic outlook follows signs of easing geopolitical tensions concerning Greenland, which has injected fresh confidence into financial markets worldwide.
Global Market Rally Fuels Indian Sentiment
Asian markets traded notably higher on Thursday, mirroring a robust overnight rally on Wall Street. In the United States, the S&P 500 recorded its most significant one-day percentage gain in two months, as investors welcomed President Donald Trump's decision to withdraw threats of imposing tariffs on European countries over Greenland. This development has alleviated immediate trade war fears, boosting risk appetite globally.
Recap of Previous Session's Performance
On Wednesday, the Indian equity markets concluded lower amidst heightened volatility, marking their third consecutive session of losses. The decline was attributed to persistent geopolitical uncertainties, relentless selling by foreign institutional investors (FIIs), and mixed third-quarter earnings reports. The Sensex dropped 270.84 points, or 0.33%, to settle at 81,909.63, while the Nifty 50 fell 75.00 points, or 0.30%, closing at 25,157.50.
Ajit Mishra, Senior Vice President of Research at Religare Broking Ltd., commented, "A sharp depreciation in the Indian rupee to fresh lows further dampened sentiment, especially in the absence of any meaningful positive surprise from the earnings season. Continued foreign institutional selling added to the pressure, keeping overall risk appetite subdued and market activity largely stock-specific."
Key Global Market Indicators for Today
Asian Markets:
- Japan's Nikkei 225 advanced by 1.07%, with the Topix gaining 0.79%.
- South Korea's Kospi rose 1.62%, surpassing the 5,000 mark, while the Kosdaq index rallied 1.43%.
- Hong Kong's Hang Seng index futures pointed towards a higher opening.
Gift Nifty: Trading around the 25,320 level, indicating a premium of nearly 142 points from the Nifty futures' previous close. This suggests a gap-up opening for Indian indices.
Wall Street Performance:
- The Dow Jones Industrial Average surged 588.64 points, or 1.21%, to 49,077.23.
- The S&P 500 increased by 78.76 points, or 1.16%, reaching 6,875.62.
- The Nasdaq Composite climbed 270.50 points, or 1.18%, closing at 23,224.83.
Notable stock movements included Nvidia gaining 2.87%, AMD jumping 7.71%, Intel surging 11.72%, while Netflix declined 2.2%. United Airlines shares rose 2.2%, Halliburton rallied 4.1%, EQT Corp advanced 6.5%, and Expand Energy gained 4.5%.
Geopolitical and Trade Developments
Greenland Deal: President Donald Trump announced that a framework for an agreement on Greenland had been reached, and he will not impose tariffs on European allies previously scheduled for February 1st.
US-EU Trade Relations: The European Parliament has suspended work on a trade deal between the EU and the United States, following Trump's repeated requests regarding Greenland control, as reported by Reuters.
India-US Trade Talks: Trump expressed optimism about the proposed India-US Bilateral Trade Agreement, stating the countries are "going to have a good deal" and praising Prime Minister Narendra Modi as a close friend and respected global leader.
India-EU Partnership: The European Union has agreed with India to proceed with signing a new security and defence partnership, according to EU Foreign Policy Chief Kaja Kallas.
Other Economic Indicators
Japan's Trade Data: Exports rose for the fourth consecutive month in December, increasing 5.1% year-on-year, while imports grew 5.3%. Japan recorded a trade surplus of 105.7 billion yen ($667.13 million), below the forecasted 356.6 billion yen.
Commodity Prices:
- Gold prices fell 0.8% to $4,793.96 per ounce, and silver declined 1.3% to $91.86, as cooling tensions reduced safe-haven demand.
- Crude oil prices stabilized; Brent crude rose 0.49% to $65.24 a barrel, while US West Texas Intermediate (WTI) crude futures dipped 0.15% to $60.53.
The convergence of positive global cues, particularly the resolution of Greenland-related tensions, sets a favorable stage for the Indian stock market's opening, though domestic factors like FII activity and earnings performance remain crucial for sustained momentum.
