Indian benchmark indices, Sensex and Nifty 50, are expected to start the day on a weaker note on October 8, 2024, following global cues that indicate a negative opening. The GIFT Nifty, a key indicator of the Indian market's direction, was trading at 24,865.50 this morning, hinting at a potential dip in the broader indices. As markets open, investors will be closely tracking US equity performance, bond yields, and the impact of geopolitical tensions on crude oil prices.

GIFT Nifty Signals Weak Opening

The GIFT Nifty is currently down in the early trade, trading at 24,865.50, suggesting that the markets could open on a weaker footing. Investors are likely to remain cautious ahead of key economic data from Japan and the return of the Chinese markets after a holiday break.

US Equities Dip as Geopolitical Tensions Escalate

On Monday, all three major US indices closed lower, with the Dow Jones Industrial Average shedding 398.51 points or 0.94 percent to end at 41,954.24, the S&P 500 losing 55.13 points, or 0.96 percent, to 5,695.94, and the Nasdaq Composite dropping 213.94 points, or 1.18 percent, to finish at 17,923.90. These declines were driven by investor concerns over rising bond yields and the impact of geopolitical tensions, particularly in the Middle East, which have also pushed up oil prices.

Bond Yields Rise, Dollar Strengthens

In the bond markets, US 10-year Treasury yields edged up to 4 percent, reflecting reduced bets on an immediate interest rate cut by the Federal Reserve. Meanwhile, the US dollar index remained near a seven-week high, fueled by strong US labor market data and global uncertainty, further impacting the forex markets. Asian currencies showed mixed movement, with the Indonesian Rupiah falling by over 1 percent, while the Japanese Yen and Singapore Dollar posted marginal gains.

Commodities Trading Mixed, Crude Oil Retreats

In the commodities market, gold prices remained largely flat, while silver fell by over 0.5 percent in early Asian trading. Crude oil prices eased slightly after a strong rally on Monday, as traders booked profits. The price increase had been driven by fears that the Middle East conflict could escalate further, potentially disrupting global oil supplies. Among LME commodities, Nickel, Zinc, and Aluminium were trading up, while Copper and Lead were down.

FIIs Extend Selling Spree, DIIs Continue Buying

On October 7, foreign institutional investors (FIIs) sold Indian equities worth Rs 8,293.41 crore, while domestic institutional investors (DIIs) continued to support the market by buying equities worth Rs 13,245.12 crore. This trend indicates that local investors remain optimistic about the market's long-term outlook, even as foreign investors trim their positions amid global uncertainties.

Stocks in Focus

Several stocks are expected to be in the news today, including:

HDFC Bank Limited: The board has approved the sale of 100% stake in HDFC Edu to Vama Sundari Investments for Rs 192 crore.

ICICI Bank: The company has fully redeemed USD 153 million of outstanding notes, further strengthening its balance sheet.

Bharat Electronics Limited: The company has secured additional orders worth Rs 500 crore, bringing its total order flow for the fiscal year to Rs 7,689 crore.

Nykaa: The company reported mid-twenties growth in net revenue for the second quarter, with the fashion vertical showing signs of recovery ahead of the festive season.

MOIL: The company recorded its best-ever September production and sales figures, with production rising 7 percent in the first half of the fiscal year.

In addition to these stocks, investors should keep an eye on developments at Puravankara, which has recently acquired land in North Bangalore for a residential project, and Hitachi Energy, which has announced plans to double its transformer manufacturing capacity over the next four years.

With geopolitical risks and ongoing concerns about global inflation, market participants will be closely monitoring commodity prices, bond yields, and corporate announcements throughout the day.

As the trading session progresses, the focus will remain on key economic data releases, corporate earnings, and the global geopolitical environment, particularly with regards to the Middle East and its potential impact on oil markets. Investors are also likely to keep an eye on upcoming IPOs, as well as regulatory updates in the banking and financial sectors.

Overall, while the markets may open on a weaker note, there are several key developments and stock-specific actions that could drive volatility throughout the session. Investors are advised to stay cautious and focus on fundamentals as they navigate the day's trading.

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