The financial markets are reacting to rising tensions along the Line of Control (LoC) between India and Pakistan, leading to a forecast of a gap-down opening for the GIFT Nifty. Meanwhile, U.S. markets finished positively after the Federal Reserve opted to maintain key interest rates. This backdrop has resulted in a buoyant start for Asian indices on Thursday, May 8, 2025.

Market Performance Overview

On Wednesday, the NSE Nifty 50 wrapped up the trading day with a modest gain of 35 points, or 0.14%, closing at 24,414. The BSE Sensex also saw a rise, climbing 106 points, or 0.13%, to finish at 80,747.

Key Global Updates to Watch

Donald Trump’s Trade Announcement

In a significant social media update, U.S. President Donald Trump teased a major trade deal set to be announced on the evening of May 8. He described the upcoming news conference involving representatives from a highly respected nation as a precursor to "the first of many" agreements.

Federal Reserve Holds Rates Steady

The U.S. Federal Reserve announced on May 7 that it will keep its benchmark lending rates stable in the range of 4.25% to 4.5%. This decision comes amidst ongoing global uncertainties, including a heated trade war, slowing economic growth, and fluctuating inflation rates.

Asian Markets Rally

On May 8, several major Asian indices opened higher, buoyed by the Fed’s decision to maintain interest rates. Here’s how they performed:

• Nikkei 225 (Japan): Up 0.13% or 40 points, reaching 36,821.
• Hang Seng (Hong Kong): Increased by 0.22%, trading at 22,745.
• Kospi (South Korea): Gained 0.20%, now at 2,579.
• Taiwan Weighted Index: Rose 0.46% to 20,644.
• Shanghai Composite (China): Up 0.10%, trading at 3,345.

U.S. Market Highlights

U.S. stock markets experienced gains on Wednesday following the Fed’s announcement. Key figures include:

• Dow Jones Industrial Average: Gained 284.97 points (or 0.70%), closing at 41,114.
• S&P 500: Increased by 0.43%, finishing at 5,631.28.
• Nasdaq Composite: Advanced 0.27%, closing at 17,738.16.

Currency Movements

The U.S. Dollar Index (DXY), which assesses the dollar’s strength against a basket of six major currencies, rose 0.22% to 99.83 on Thursday morning. The index includes currencies like the British Pound, Euro, Japanese Yen, and others. In contrast, the Indian Rupee fell by 0.45%, ending at 84.82 per dollar on May 7.

Crude Oil Prices

Crude oil prices saw an uptick on Wednesday. As of Thursday morning:

• WTI Crude: Trading at $58.32, up 0.43%.
• Brent Crude: Now at $61.30, with an increase of 0.29%.

Foreign Investment Insights

According to provisional data from the NSE, foreign institutional investors (FIIs) were net buyers of shares worth ₹2,585.86 crore. Meanwhile, domestic institutional investors (DIIs) also contributed as net buyers, accumulating shares valued at ₹2,378.49 crore on May 7, 2025.

Rising Gold Prices

Gold prices have surged to unprecedented heights, largely due to geopolitical tensions. As of today, 24-carat gold is priced at ₹97,380 per 10 grams, nearing its all-time high. Over the past month, gold has escalated by 10.85%. The rates for 22-carat gold and 18-carat gold stand at ₹89,265 and ₹73,035 respectively.

This dynamic trading environment reflects the intricate interplay of geopolitical developments and economic policies, which investors should monitor closely.