Indian shares are poised to open on a high note this Tuesday, driven by strong signals from Wall Street and European markets. However, profit-taking might curb gains as the trading session progresses.
On Monday, the benchmark indexes Sensex and Nifty experienced a volatile session, ultimately closing with marginal changes. The Indian rupee appreciated by 8 paise, finishing at 83.87 against the U.S. dollar.
This morning, Asian markets displayed mixed performances. The People's Bank of China kept its benchmark loan prime rate unchanged, following an unexpected reduction in July. Investors are keenly analyzing minutes from the Reserve Bank of Australia's August meeting, while also anticipating the release of the Federal Open Market Committee (FOMC) minutes and a speech by Fed Chair Jerome Powell at the Jackson Hole symposium, seeking insights into the pace and timing of potential interest-rate cuts.
The U.S. dollar hovered near a seven-month low, and Treasury yields declined on expectations that the Federal Reserve might soon indicate its readiness to commence interest rate reductions. With recession concerns waning, it is anticipated that the U.S. central bank will reduce rates by 25 basis points at each of the three remaining meetings in 2024.
Gold maintained its position above $2,500 per ounce during Asian trading, whereas oil prices continued to fall after a 2 percent decline on Monday due to ongoing concerns over demand in China and Israel's acceptance of a proposal aimed at resolving disagreements that have hindered a ceasefire agreement in Gaza.
In the U.S., stocks rallied overnight amidst a broad-based optimism as economic concerns eased and Federal Reserve officials indicated readiness to embark on an interest rate-lowering cycle. Economic indicators revealed a larger-than-expected drop in leading indicators for July, although this did not signal an impending recession.
The Nasdaq Composite, dominated by tech stocks, surged 1.4 percent, while the S&P 500 increased by 1 percent, marking its eighth consecutive session of gains. The Dow Jones Industrial Average also saw a rise of 0.6 percent.
European markets continued their upward trend for the fifth consecutive day on Monday, as investors awaited more insights into the U.S. economy. The pan-European STOX 600 index gained 0.6 percent, with Germany's DAX rising by 0.5 percent, France's CAC 40 climbing 0.7 percent, and the U.K.'s FTSE 100 advancing by 0.6 percent.
