Indian shares are poised for a positive opening on Monday despite mixed signals from global markets. Strong foreign institutional investor (FII) inflows, robust domestic macroeconomic indicators, and diminishing worries about the health of the global economy are expected to bolster underlying sentiment.
On Friday, the benchmark indexes Sensex and Nifty surged by 1.6% and 1.5% respectively, driven by widespread buying.
Asian markets presented a mixed picture this morning, following the Federal Reserve's unexpected 50-basis-point rate cut last week. Trading volumes in the region remained light due to a market holiday in Japan.
Attention is now shifting to a series of critical economic data from the U.S. this week, including GDP figures, key inflation metrics, surveys on global manufacturing, consumer confidence indexes, and durable goods orders. These data points could provide further insights into the Federal Reserve's future rate decisions.
Investors are also keenly awaiting speeches from at least nine Fed officials, including Chair Jerome Powell, two governors, and New York Fed President John Williams.
According to CME FedWatch, Fed futures traders are currently pricing in a total of 75 basis points in rate cuts by the end of this year, with an expectation of nearly 200 basis points in cuts by December 2025.
In Europe, the Swiss National Bank is set to meet on Thursday, with markets fully pricing in a quarter-point rate cut. Sweden's central bank is also expected to reduce rates by 25 basis points during its meeting on Wednesday.
China’s central bank surprised many by lowering its 14-day repo rate by 10 basis points today. Conversely, reports suggest the U.S. might propose a ban on Chinese software and hardware in autonomous vehicles.
Meanwhile, the dollar index edged up slightly this morning, and gold remained steady near record highs as U.S. congressional leaders announced an agreement on a short-term spending bill to fund federal agencies for about three months.
Oil kept its upward trajectory, having jumped roughly 4% last week on optimism that lower borrowing costs would boost global economic growth and demand.
Geopolitical tensions in the Middle East continue to escalate as Israel carried out strikes in Gaza and Lebanon, raising fears of an all-out war in the region. Hezbollah launched more than 100 rockets early Sunday across a larger swath of northern Israel after Israel allegedly detonated several electronic devices used by the Lebanese group.
U.S. stocks ended mixed on Friday but posted strong gains for the week after the Fed's aggressive rate cut earlier. Investor sentiment was somewhat dampened after delivery giant FedEx revised its earnings outlook downward.
The Dow closed marginally higher at a new record high, while the S&P 500 eased by 0.2%, and the Nasdaq Composite, known for its tech-heavy composition, fell by 0.4%.
European stocks ended lower on Friday after a rally in the previous session driven by the Fed's significant rate cut. The pan-European STOXX 600 fell by 1.4%. Germany’s DAX and France’s CAC 40 both dropped around 1.5%, whereas the U.K.'s FTSE 100 declined by 1.2%.
