5 things that changed for the stock market over night – Gift Nifty to US jobs print

Asian stocks followed Wall Street’s decline, while Treasuries held steady after a surge that indicated labour market softness, according to a Bloomberg report.

On Wednesday’s trading session, the benchmark domestic equity indices, the Sensex and the Nifty 50, continued their record-breaking run into the third consecutive session as investors remained upbeat about the prospects for robust growth and political stability following the 2024 general elections.

The 30-share BSE Sensex ended 357.59 points higher or 0.52% at 69,653.73, while the NSE Nifty 50 rallied 82.60 points, or 0.4%, to close at 20,937.70.

According to Vinod Nair, Head of Research at Geojit Financial Services, post-state elections, market optimism thrives, confirming policy continuity and meeting investor expectations. A robust FII reversal is fuelled by receding inflation and dropping yields in both US and Indian markets. The allure of Indian market gains post-China credit rating downgrade and decline in oil prices was followed by ease in geopolitical tensions. A strong rebound in IT, driven by reduced US recession risks and in anticipation of robust summer demand, fuels the momentum in the power sector.

“Despite a promising outlook, short-term profit booking may occur due to domestic premium valuation concerns. Further, lingering El Nino risks, a drop in reservoir levels, and reduced sowing may hold RBI to profoundly upgrade H2FY24 growth and reduce future inflation estimates,” added Nair.

GIFT Nifty

The Gift Nifty is trading around 21,055 level as compared to the Nifty futures’ previous close of 21,040.55. It is up 14.45 points from Wednesday’s close on Nifty Futures and amid mixed global cues.

According to Rupak De, Senior Technical analyst at LKP Securities, the index formed a hanging man pattern on the daily chart, suggesting the possibility of a bearish reversal. The bearish formation around the crucial resistance of 21,000 amplifies the bearish sentiment. The support lies at 20,850, below which the market may witness a healthy correction in the short term. On the other hand, a move above 21,000 might trigger a resumption of the bullish trend.

Asian Markets

According to Bloomberg report, Asian stocks reflected Wall Street’s weakness, and Treasuries steadied after a rally signalling softness in the labour market based on new data. Commodity prices plummeted, led by oil.

Australia’s and Japan’s stocks started to trade lower, and futures contracts for benchmarks in Hong Kong declined as well. That came after the S&P 500 saw its third consecutive day of losses, the longest run of losses since October.

After a surge in long-dated debt earlier in the day caused the 10-year yield to drop to 4.1%, its lowest level since August, Treasury bonds were essentially flat on Thursday. Following Wednesday’s modest increase in the policy-sensitive two-year yield to 4.6%, short-dated US debt saw minimal movement in early Asian trading, as per Bloomberg report. 

Wall Street

The steep decline in energy stocks on Wall Street offset gains in utilities and industrials stocks, causing the S&P 500 to give up its earlier gains.

The S&P 500 lost 17.84 points, or 0.39%, to 4,549.34, the Dow Jones Industrial Average fell 70.13 points, or 0.19%, to 36,054.43, and the Nasdaq Composite lost 83.20 points, or 0.58%, to 14,146.71.

According to a report by Reuters, longer-dated US Treasury yields decreased on Wednesday as economic data maintained expectations that the Federal Reserve will have room to cut rates next year. The gauge of global equities also declined, heading towards a third straight dip.

The ADP National Employment Report out on Wednesday revealed that US private payrolls increased by 103,000 jobs last month, which was less than the 130,000 estimate of economists surveyed by Reuters. 

The number of jobs added in October was revised down from 113,000 to 106,000, as per the original report.

Crude Oil

According to a report by Reuters, oil prices stabilised after dropping by almost 4% over night to their lowest settlements since June. Despite assurances from OPEC members that they would strictly control supply, concerns about the demand for fuel globally caused prices to decline.

Futures for Brent crude increased by 0.4% to $74.60 per barrel, while those for US West Texas Intermediate crude rose by 0.5% to $69.73 per barrel.

Gold

Gold prices increased by 0.2% to $2,028.81 an ounce, according to a Reuters report.

(more to come) 

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Published: 07 Dec 2023, 07:43 AM IST