The Indian stock market is bracing for a turbulent start as the benchmark indices, the Sensex and Nifty 50, are anticipated to open lower on Tuesday. This comes in response to a significant sell-off in global markets, particularly following a sharp decline in the US stock exchanges. The Nasdaq experienced its most substantial one-day drop since September 2022, raising concerns among investors about the global economic outlook.
Market Performance Overview
On Monday, the Indian equity market closed in the red due to weak global cues, primarily driven by apprehensions regarding US tariffs. The Sensex fell by 217.41 points, or 0.29%, finishing at 74,115.17, while the Nifty 50 saw a decline of 92.20 points, or 0.41%, closing at 22,460.30.
Siddhartha Khemka, who leads research at Motilal Oswal Financial Services, remarked, "The market is likely to remain range-bound due to the lack of significant domestic triggers. Investors will keep a close eye on global developments, including US tariffs and geopolitical negotiations, to gauge their effects on the US dollar and crude oil prices."
Global Market Dynamics
Asian Markets
Asian indices faced declines on Tuesday, mirroring the overnight losses from Wall Street and raising fears of a potential recession in the US. Key movements included:
- Japan’s Nikkei 225: Down 2.7%
- Topix Index: Decreased by 2.8%
- South Korea’s Kospi: Dropped 2.19%
- Kosdaq: Fell 2.22%
US Market Impact
US markets ended sharply lower on Monday, with the Dow Jones Industrial Average plunging 890.01 points, or 2.08%, to close at 41,911.71. The S&P 500 experienced a decline of 155.64 points, or 2.70%, finishing at 5,614.56. The Nasdaq Composite closed 727.90 points, or 4.00%, lower at 17,468.32. Notably, tech giants suffered significant losses:
- Tesla: Down by 15.4%
- Nvidia: Fell 5.07%
- Microsoft: Decreased by 3.34%
Economic Indicators
Japan’s Economic Growth
Japan reported a slower economic expansion during the final quarter of the previous year, with its GDP growing by 2.2% annually, a downgrade from an initial estimate of 2.8%. This adjustment translates to a 0.6% quarter-on-quarter growth, slightly below the previously projected 0.7%.
Commodity Prices
Gold and Crude Oil Trends
Gold prices remained stable as investors awaited critical inflation data this week, which will influence the Federal Reserve’s interest rate decisions. Current figures show:
- Spot Gold: Holding steady at $2,887.61 per ounce
- US Gold Futures: Down by 0.3% to $2,891.70
Crude oil prices have also seen a downward trend for the second consecutive day, with concerns regarding US tariffs potentially dampening energy demand:
- Brent Crude Futures: Down 0.53% to $68.91 per barrel
- West Texas Intermediate: Decreased by 0.74% to $65.54 per barrel
Currency Market Overview
The US dollar index remained relatively stable overnight, with minor fluctuations against the Aussie and sterling, while it recorded losses against the yen. The index settled at 103.89, with the yen reaching a five-month high at 146.625 per dollar before trading at 146.85.
As the market navigates through these challenging conditions, investors are urged to stay informed and ready to adapt to the rapidly changing landscape.
