GIFT Nifty Indicates A Firm Start; US, Asian Markets Gain

Indian equity benchmark indices are poised for a positive opening on Tuesday, following record closing highs for the US benchmarks S&P 500 and Dow on Wall Street.

As of 7:28 AM, GIFT Nifty futures were trading at 25,982, indicating an increase of around 70 points compared to the last close of Nifty futures.

On Monday, Indian benchmarks BSE Sensex and Nifty 50 reached all-time highs, with the BSE Sensex rising by 384 points, or 0.45%, to close at 84,928.61 after hitting a peak of 84,980 during the session. The Nifty 50 also recorded an all-time high of 25,956, finishing 148 points higher, or 0.57%, at 25,939.

Asian markets reached their highest levels in over two months on Tuesday, buoyed by expectations of additional US rate cuts. Investors are also awaiting a policy decision from the Reserve Bank of Australia. In a notable press conference, China’s top financial regulators announced a series of measures to support its struggling economy, including reductions in mortgage rates for existing homes.

While the Reserve Bank of Australia is expected to maintain its current rates, speculation has arisen that it might follow the Federal Reserve’s recent 50 basis point cut. The MSCI Asia-Pacific index outside Japan rose 0.04% to 586.31, and Japan’s Nikkei surged 1.69% to a near three-week high ahead of an anticipated speech from Bank of Japan Governor Kazuo Ueda.

On Monday, China’s central bank reduced its 14-day repo rate by 10 basis points, following a previous decision that disappointed markets by not cutting longer-term rates.

In the US, stocks closed slightly higher as traders adjusted to the Fed’s recent decision. The market is currently divided on whether the Fed will implement another 50 basis point cut or a 25 basis point cut in November, with the CME FedWatch tool indicating 76 basis points of easing expected this year.

Brown Brothers Harriman Senior Markets Strategist Elias Haddad noted that the market may be overestimating the Fed’s ability to ease rates significantly, suggesting that robust US jobs data would be necessary to prompt a substantial reassessment of expectations for Fed funds rates.

The upcoming non-farm payrolls report is due on October 4. Until then, a dovish Fed combined with a strong US economy is likely to support market risk sentiment and could weaken the dollar, particularly against growth-sensitive currencies. The dollar index stood at 100.95, close to its one-year low of 100.21 reached last week. The yen remained stable at 143.65 per dollar.

In commodities, oil prices saw a slight increase in early trading, with Brent crude futures rising 0.26% to $74.09 per barrel and US crude futures up 0.3% at $70.6. Oil prices had fallen on Monday due to demand concerns and weak economic data from Europe.