Indian benchmark indices, Sensex and Nifty 50, are expected to open on a weak note on October 3, 2024. This follows cues from GIFT Nifty, which was trading around 25,725 earlier this morning. After a weak performance on October 1, the Nifty 50 closed below 25,800, signaling concerns related to the widening current account deficit and disappointing manufacturing data.

GIFT Nifty Signals Weak Opening

The GIFT Nifty index, which provides early indications of Indian market movements, suggests a negative opening today. As of 7:00 am IST, Nifty futures were trading at 25,725, pointing toward a subdued market performance.

Asian Equities Led by Japan

Asian markets showed strength this morning, with Japan leading the pack despite the tensions in the Middle East. The recent uptick in Wall Street also provided some support. However, the Indian markets are expected to follow weak cues from the US bond yields and Asian currencies, which have shown signs of depreciation.

US Equities and Bond Yields

While the S&P 500 remained largely flat, closing just 0.01% higher, the Nasdaq Composite gained 0.08%. Investors remain cautious due to uncertainties surrounding labor data and geopolitical issues. The US bond market saw yields rise, with the 10-year Treasury yield touching 3.79% and the 2-year bond yield climbing to 3.64%.

Dollar Index Gains

The Dollar Index gained strength, reaching 101.77, as robust jobs data in the US backed the Federal Reserve’s cautious stance. The rising dollar has also put pressure on Asian currencies, with most of them trading lower.

Gold and Crude Prices

Gold remained stable after a slight decline, with the US jobs report dampening hopes of an imminent rate cut by the Federal Reserve. On the other hand, crude oil prices ticked higher due to geopolitical tensions and concerns over potential disruptions to global oil supplies.

Commodities on the Rise

Commodity markets saw gains as Nickel and Lead both posted over 2% increases. The uptick in LME commodities signals stronger demand, which could have positive implications for metals-related stocks in today's trade.

FII and DII Fund Flow

Foreign institutional investors (FIIs) continued to sell off equities, with net outflows amounting to Rs 5,579 crore on October 1. Meanwhile, domestic institutional investors (DIIs) were net buyers, purchasing equities worth Rs 4,609 crore. This trend highlights a clear contrast between global and local investor sentiment.

To sum up, the Indian market faces a range of global headwinds today, from the rising US bond yields to the strengthening dollar and weak Asian currencies. While Asian equities have shown some resilience, the overall market sentiment remains cautious, with FIIs continuing to offload stocks.

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This combination of global market cues, rising bond yields, and the Dollar Index's movements is set to drive today's trade. Investors should stay cautious, keeping a close watch on market sentiment, particularly given the geopolitical tensions in the Middle East and their impact on commodity prices.

Hope you're all set for today’s trade, and we wish you a profitable day ahead!