Indian Stock Market Set for Strong Start: Global Gains and Political Stability Drive Positive Sentiment

Indian Stock Market Update: Overnight Changes and Key Influences

The Indian stock market is anticipated to start the day on a strong note, driven by favorable global trends. Both Sensex and Nifty 50 are set to open higher on Thursday, reflecting positive sentiments from international markets.

Global Market Influence

Asian markets have shown an optimistic trend, influenced by gains in the US stock market. The positive movement was propelled by soft economic data, which raised hopes for interest rate cuts by the Federal Reserve. In Japan, the Nikkei 225 advanced by 1.12%, and the Topix increased by 0.65%. Although Hong Kong’s Hang Seng index futures suggested a weaker start, overall sentiment remained positive. South Korea’s markets were closed due to a public holiday.

Indian Market Sentiment

In India, investor sentiment has been buoyed by political developments. The National Democratic Alliance (NDA) leaders have reiterated their support for Narendra Modi’s Bharatiya Janata Party (BJP), aiming for a third term in government. This political stability is expected to bring supportive policies, which is a positive signal for the markets.

On the previous trading day, the Indian stock market saw a significant recovery. The Sensex surged by 2,303.19 points (3.20%) to close at 74,382.24, while the Nifty 50 rose by 735.85 points (3.36%) to settle at 22,620.35. According to Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services Ltd., the market will likely focus on the formation of the new government and key cabinet appointments, particularly in Finance, Defense, Roads, Energy, Commerce, and Railways.

Key Market Cues for Sensex Today

1. Gift Nifty: Trading around the 22,680 level, indicating a positive start for Indian stock indices.

2. Wall Street Performance: The US stock market closed higher, with the S&P 500 and Nasdaq reaching record highs. The Dow Jones Industrial Average increased by 96.04 points (0.25%) to 38,807.33, the S&P 500 rose by 62.69 point” (1.18%) to 5,354.03, and the Nasdaq Composite climbed by 330.86 points (1.96%) to 17,187.91. Nvidia’s stock price surged by 5.2%, making it the world’s second-most valuable company, surpassing Apple.

3. US Private Payrolls: Hiring by US private employers decreased to a four-month low in May, with private payrolls increasing by 152,000 jobs, lower than the forecasted 175,000.

4. US Services PMI: The US services sector returned to growth in May, with the ISM non-manufacturing PMI rising to 53.8 from 49.4 in April, the highest since August last year.

5. Treasury Yields: US 10-year Treasury yields dropped to a two-month low, influenced by weak job growth data. Benchmark 10-year note yields decreased by 5 basis points to 4.289%, while two-year note yields fell by 4 basis points to 4.731%.

6. Oil Prices: Crude oil prices continued to rise, with Brent crude increasing by 0.52% to $78.82 a barrel, and US West Texas Intermediate (WTI) crude futures climbing by 0.66% to $74.56.

Political Developments and Market Outlook

The Lok Sabha election results have solidified Narendra Modi’s position as the leader of the NDA. With the election overhang resolved, the market’s focus is expected to shift back to fundamentals. The NDA’s support for Modi suggests a stable government, which is likely to implement supportive economic policies.

In conclusion, the Indian stock market is poised for a positive start, driven by favorable global trends and political stability. The focus will now be on the formation of the new government and the allocation of key cabinet portfolios, which will play a crucial role in shaping the market’s direction in the near term.

Disclaimer: The views expressed above are those of individual analysts and broking companies, not of FinBrook. Investors are advised to consult certified experts before making any investment decisions.