Indian markets showed strength on Thursday, with the Nifty gaining 82 points to close above the crucial 24,000 level. The Nifty 50 settled at 24,085.70, gaining 96.55 points or 0.40%, while the Sensex closed 347.14 points higher at 77,155.62. According to The Economic Times, investor sentiment was boosted by falling crude oil prices, a stable rupee, and optimism about a potential US-Iran agreement. The Gift Nifty's near-month contract was trading at 24,056 level, down 37 points from the previous close, signaling a muted start for Indian markets. The contract opened at 24,065.50 and touched an intraday low of 23,964.50 before rallying to a high of 24,105.50, with each pullback attracting fresh buying rather than profit-booking.
Indian government bonds could open Thursday's session with a declining bias after the US Federal Reserve turned hawkish, with most members anticipating the start of an interest rate-hiking cycle before the end of the calendar year. The yield on the benchmark 6.94 per cent 2036 note is likely to move between 6.85 per cent and 6.90 per cent, according to a trader with a private bank, compared to its Wednesday close at 6.8626 per cent. As per the trader, "though nothing on rates was expected, the tone of the new governor was particularly very hawkish, which was not anticipated, and which led to a strong reaction in the shorter end of the Treasury yield curve." The Fed held interest rates steady but policymakers expect a hike in borrowing costs later this year amid growing concerns that inflation will remain sticky above the Fed's 2 per cent target.
US equity-index futures for the S&P 500 rose 0.78% while Europe's Euro Stoxx 50 dipped 0.49%, providing mixed global cues for Indian markets. Wall Street remained largely steady ahead of the Fed meet decision, with S&P 500 opening 0.9% higher at 7,524.50 and Dow Jones stable at 52,013.52 after a record high closing. However, US markets closed in red on Wednesday after the Federal Reserve kept interest rates steady but gave a hawkish outlook for the coming year. The Dow Jones erased over 500 points, the S&P 500 fell 1.2%, and the NASDAQ slumped 1.3% on Wednesday. Asian markets opened primarily higher as US-Iran signed a peace deal, with Japan's Nikkei 225 rising 1.44% and South Korea's Kospi advancing 0.93%. Oil prices dropped significantly on the peace deal, with Brent crude falling below $78 per barrel, while gold jumped to near $4,295 per ounce following the US-Iran developments.
The India VIX, a fear gauge, fell 4% to settle at 12.67 levels, indicating reduced market volatility and improved investor confidence. According to The Economic Times, on the downside, 24,000 is expected to act as immediate support, with a breach below this level potentially triggering a correction towards 23,800. Conversely, a decisive move above 24,100 may pave the way for a rally towards 24,300 and higher. The weekly BSE options expiry is likely to add to market volatility, while analysts expect Indian equities to sustain their positive bias and continue their gradual uptrend in anticipation of the US-Iran MoU being formally signed on Friday. Foreign portfolio investors net bought shares worth ₹1,025 crore on Thursday, while DIIs were net buyers at ₹3,517 crore, providing additional support to market sentiment.
Bank Nifty ended 287.90 points, or 0.50%, higher at 57,585.05 on Wednesday, forming a bullish candlestick pattern and continuing to consolidate within Monday's price range after a strong rally in recent sessions. According to Bajaj Broking Research, after a sharp rally of around 4,800 points in the previous 10 sessions, Bank Nifty has been witnessing healthy consolidation over the last three sessions. The Nifty PSU Bank Index ended Wednesday's session higher by more than 1.5%, with PSU banking stocks remaining in focus. The Indian rupee ended higher against the US dollar for a fifth consecutive session at 94.33, logging its longest winning streak in a year as lenders and exports cut dollar positions aggressively. Bajaj Broking Research expects the index to head towards 58,300 and 59,000 levels in the coming weeks being the measuring implication of the recent four-week range breakout (52,700-55,500), with index sustaining above 55,500-56,000 keeping the short-term bias positive.
