The Indian stock markets opened on a positive note on August 22, 2024, following the global cues driven by expectations of a US Federal Reserve rate cut. The Nifty 50 index opened higher, gaining 93.20 points to start the day at 24,863.40, while the BSE Sensex saw a rise of 301.94 points, opening at 81,207.24.
Market sentiment was bolstered by the minutes of the Federal Open Market Committee (FOMC) meeting, which hinted at a potential rate cut in September. According to Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd., “Nifty is poised for upward momentum, targeting its all-time high of 25,078.30.” The rate cut expectations also led to a decline in U.S. 10-year Treasury yields to 3.79 per cent and the US Dollar Index to a one-year low of 101.
In the domestic market, oil and aviation stocks were expected to benefit from the significant decline in crude oil prices, with Brent crude trading below $76 per barrel. Rahul Kalantri, VP of Commodities at Mehta Equities Ltd., noted, “Concerns over Chinese demand and recent US labor data are weighing on crude oil prices, though hopes for a Fed rate cut are providing support at lower levels.”
Among the top gainers on the NSE as of 9:30 am were Grasim Industries, up 1.99%, Tata Consumer Products, rising 1.47%, Infosys, gaining 0.92%, Tech Mahindra, up 0.84%, and Bharti Airtel, increasing by 0.78%. On the other hand, the top losers included Power Grid, down 1.56%, Dr. Reddy’s Laboratories, falling 0.83%, Shriram Finance, declining 0.75%, Tata Consultancy Services (TCS), dropping 0.42%, and Mahindra & Mahindra (M&M), which fell by 0.41%.
Commenting on the technical outlook, Vikas Jain, Head of Research at Reliance Securities, said, “Nifty-50 has closed at the higher end of the range, and we expect some retracement to test the lower range of 24,550 levels while on the higher side 25,000 will be a resistance.” He added that volatility is expected to increase in the second half of the day with respect to the weekly expiry.
In the commodities market, gold prices remained steady, with support seen at $2,492 per ounce, driven by the expectation of a rate cut. Silver followed a similar trend, trading within its support and resistance levels. Crude oil, however, faced volatility due to mixed factors including U.S. employment data and concerns about China’s economic slowdown. Rahul Kalantri, VP Commodities at Mehta Equities Ltd, commented on the bullion market, saying, “Gold has support at ₹71,510-₹71,320, with resistance at ₹72,120-₹72,380. Silver has support at ₹84,250-₹83,780, with resistance at ₹85,600-₹86,150.”
As the market progresses, all eyes are on the upcoming speech by US Federal Reserve Chair Jerome Powell at the Jackson Hole symposium, which is expected to provide further clarity on the Fed’s monetary policy direction.
