The Indian stock market is anticipated to open on a weak note on Wednesday, reflecting losses in global peers and lower risk appetite among investors. The subdued sentiment in Asian markets, coupled with concerns about the US Federal Reserve‘s monetary policy outlook, has contributed to the expected cautious start for the Indian benchmark indices. Here’s a closer look at the factors impacting the market outlook for the day.
Global Market Influence
Asian Markets: Asian markets experienced a decline as investors awaited further clarity on the US Federal Reserve‘s monetary policy. Losses in Asian shares were attributed to uncertainties surrounding the upcoming speech by Fed Chair Jerome Powell at the Jackson Hole meeting on Friday. Key economic data releases, including the contraction of factory activity in Japan and a decline in business activity in Australia, also added to the negative sentiment.
US Stocks: US stock indices ended mostly lower on Tuesday, reflecting concerns over a potential interest rate hike by the Federal Reserve. The Dow Jones Industrial Average fell by 174.86 points, or 0.51%, while the S&P 500 declined by 12.22 points, or 0.28%. The Nasdaq Composite managed a modest gain of 8.28 points, or 0.06%. The downgrade of credit ratings for multiple regional US lenders by S&P led to a decline in banking stocks.
Indian Market Recap
On Tuesday, the Indian equity indices, namely the Sensex and Nifty, ended the trading session on a flat note despite positive trends in global markets. The mixed performance in global markets, along with key economic data releases in the Asian region, has created an atmosphere of caution in the Indian stock market.
Asian Market Movement
Japan: Japan’s Nikkei 225 fell by 0.3%, and the broader Topix index declined by 0.36%. The contraction of factory activity in August, as indicated by a private survey, contributed to the decline in Japanese equities.
Australia: Australia’s S&P/ASX 200 traded marginally lower as business activity contracted at the fastest pace in 19 months. The composite purchasing managers index for August came in at 47.1, indicating a contraction.
South Korea: South Korea‘s Kospi lost 0.27%, and the Kosdaq slipped 0.32%, further illustrating the cautious sentiment prevailing in the Asian markets.
Hong Kong: Hong Kong‘s Hang Seng index futures were also lower, indicating a potential negative start. The index futures stood at 17,655 compared to the previous close of 17,791.01 for the Hang Seng Index.
Indian Market Outlook
The Gift Nifty was trading at 19,350, a drop from the Nifty futures’ previous close of 19,388.75. This suggests a negative start for the Indian benchmark indices. The global uncertainties, combined with lower risk appetite, are expected to influence the opening performance of the Indian stock market.
Conclusion
The Indian stock market is poised for a weak opening on Wednesday due to losses in global peers and lower risk appetite among investors. The cautious sentiment in Asian markets, driven by key economic data releases and uncertainties surrounding the US Federal Reserve’s monetary policy outlook, has contributed to the expected negative start for the Indian benchmark indices. As the trading day unfolds, market participants will closely monitor global developments and their potential impact on the Indian stock market.
Disclaimer: The information provided here is for educational purposes only and should not be considered financial advice. Always conduct thorough research and consider consulting a financial professional before engaging in algorithmic trading.