The Indian stock market is set for a cautious opening on Friday, influenced by mixed global cues, volatile commodity prices, and fresh macroeconomic updates. The Gift Nifty indicates a negative start, while recent developments like the India-UK Free Trade Agreement (FTA), the European Central Bank (ECB) policy, and fluctuations in gold and crude oil prices are expected to shape market sentiment.
Gift Nifty Trends
The Gift Nifty was trading around the 24,980 level, reflecting a discount of nearly 115 points from the previous close of Nifty futures. This suggests a weak start for both Sensex and Nifty 50, as traders adopt a cautious stance after Thursday’s sell-off.
Thursday Market Recap
The domestic equity market witnessed heavy selling pressure on Thursday. The Nifty 50 closed below the 25,100 mark, while the Sensex fell by 542.47 points (0.66%) to 82,184.17. The Nifty 50 slipped 157.80 points (0.63%), settling at 25,062.10.
Ajit Mishra, SVP of Research at Religare Broking, highlighted,
“Nifty failed to cross the resistance at 25,250, signaling cautious sentiment. A stock-specific and hedged strategy remains advisable in the current market environment.”
Global Market Cues
1. Asian Markets
Asian markets traded lower, mirroring the mixed trend from Wall Street. Japan’s Nikkei 225 dropped 0.41%, Topix declined 0.55%, South Korea’s Kospi eased 0.1%, and the Kosdaq slipped 0.48%. Hong Kong’s Hang Seng futures also indicated a softer opening.
2. Wall Street Performance
The US stock market ended mixed overnight. While the S&P 500 and Nasdaq closed at record highs, boosted by Alphabet’s strong Q2 results, the Dow Jones Industrial Average slipped 0.70% to 44,693.91.
- S&P 500 rose 0.07% to 6,363.35.
- Nasdaq added 0.18% to 21,057.96.
Big tech stocks saw mixed action: Alphabet (+0.88%), Nvidia (+1.73%), Microsoft (+0.99%), Amazon (+1.73%), while Tesla plunged 8.2% and IBM dropped 8%.
Key Macro Developments
3. European Central Bank (ECB) Policy
The ECB kept its key interest rate unchanged at 2%, signaling a pause after eight rate cuts since June 2024. The decision reflects a wait-and-watch approach amid uncertainties surrounding Europe-US trade relations.
4. India-UK Free Trade Agreement (FTA)
India finalized a historic FTA with the United Kingdom, expected to boost bilateral trade by $34 billion annually.
- 99% of Indian exports will enjoy tariff benefits.
- British products like whisky, cars, medical devices, and cosmetics will become more affordable in India.
This move is anticipated to strengthen India’s manufacturing and export-oriented sectors.
5. US Jobless Claims
Fresh data showed US jobless claims dropped to 217,000 for the week ending July 19, beating expectations of 226,000 claims. This reflects resilience in the US labor market, which could influence Federal Reserve policy outlook.
6. Gold Prices
Gold prices edged higher, supported by a weaker US dollar.
- Spot gold rose 0.1% to $3,371.86 per ounce.
- US gold futures remained steady at $3,374.80 per ounce.
7. Crude Oil Prices
Crude oil prices gained amid reports of Russia planning to restrict gasoline exports.
- Brent crude climbed 0.30% to $69.39 per barrel.
- WTI crude rose 0.32% to $66.24 per barrel.
Market Outlook for Sensex & Nifty 50
With global cues pointing to uncertainty, Sensex and Nifty 50 may continue to face selling pressure. However, stock-specific opportunities in private banking, IT, and export-oriented sectors could offer selective gains. Analysts suggest adopting hedging strategies and focusing on fundamentally strong companies.