The Indian stock market is expected to open with positive momentum, mirroring gains in global markets. Several overnight developments have influenced this outlook, spanning from Asian market rallies to fluctuations in gold prices.
1. Gift Nifty Signals Positive Start
The Gift Nifty is trading around the 25,939 level, a premium of approximately 797 points compared to the previous Nifty futures close. This substantial premium indicates a strong gap-up opening for Indian equity markets. The Gift Nifty, a US-dollar-denominated derivative futures contract based on the Nifty 50, serves as a key indicator for traders gauging pre-market behavior. It replaced the SGX Nifty and operates for nearly 21 hours, covering Asian, European, and U.S. trading sessions.
2. Asian Markets Rally
Asian markets are trading higher, tracking the overnight rally on Wall Street. Japan's Nikkei 225 has surged by 2.44%, while the Topix index has risen by 1.94%. South Korea's Kospi has jumped over 5%, triggering a buy-side circuit breaker, and the Kosdaq has climbed 2.32%. Hong Kong's Hang Seng index futures also indicate a positive opening.
3. Nasdaq's Record High
The US stock market concluded trading with gains, with the Nasdaq achieving a record high close. This surge is partly attributed to rising expectations of a Federal Reserve interest rate cut. The Dow Jones Industrial Average rose 1.05% to close at 49,407.66, while the S&P 500 added 0.54% to finish at 6,976.44. The Nasdaq Composite climbed 0.56% to 23,592.11. Gains in semiconductor and artificial intelligence-linked stocks primarily drove the US market rally.
4. India-US Trade Deal
Investor sentiment has been boosted by news of an India-US trade deal. US President Donald Trump announced an agreement with Prime Minister Narendra Modi to reduce reciprocal tariffs imposed by the US on Indian goods to 18% from 25%. India will also lower tariffs and non-tariff barriers on US imports, fostering improved global risk appetite and equity market outlook.
5. Gold Prices Steady
Gold prices are hovering near record highs, holding above the $3,600 level. Growing expectations of a Federal Reserve rate cut have increased demand for the precious metal. Spot gold price rose 0.1% to $3,640.41 per ounce. Bullion rose to a record high of $3,646.29 on Monday.
6. Domestic Market Performance
On Monday, Indian markets closed on a strong note, recovering from losses in the previous session. The BSE Sensex gained 943.52 points, or 1.17%, to close at 81,666.46, while the NSE Nifty 50 advanced 262.95 points, or 1.06%, to end at 25,088.40.
In conclusion, the Indian stock market is poised for a positive opening, influenced by a combination of global cues, including the strong performance of the Nasdaq, gains in Asian markets, and the India-US trade deal. The Gift Nifty indicates a significant gap-up, reflecting improved investor sentiment.