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Indian benchmark indices, BSE Sensex and Nifty 50, rose at market open on Monday, following positive momentum from Wall Street and Asian markets.
Sensex opens 530 points ahead at 78,570
Indian benchmark indices, BSE Sensex and Nifty 50, rose at market open on Monday, following positive momentum from Wall Street and Asian markets.
At the opening bell, the BSE Sensex surged 526.78 points, or 0.67%, to 78,568.37, while the Nifty 50 was up 146.50 points, or 0.62%, at 23,734.
Indian markets are drawing strength from lower-than-expected core inflation in the US, which has helped counterbalance the Federal Reserve’s hawkish stance on interest rates, bolstering Wall Street shares on Friday.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said: “The FII buying witnessed in early December completely reversed last week with FII selling of Rs 15826 crores. The outperformance of the US (S&P 500 up 25 per cent YTD) and the relative underperformance of India (Nifty up 14.64 per cent YTD) are driving this change in FII strategy. The strength of the US economy, robust US corporate earnings, expectation of corporate tax cut by President Trump soon after assuming office and the steady appreciation in US dollar are factors favourable to the US market. Slowdown in Q2 GDP growth and stagnation in corporate earnings in India have soured the domestic market sentiments. In the short run there will be market rebounds which may be followed by renewed FII selling. A sustained rally is possible only when we have indications of a growth revival in the economy. This is likely in early 2025.”
Global Markets
Japan’s Nikkei climbed 0.96%, with the Topix up by 0.77%. South Korea’s Kospi gained 0.9%, and the Kosdaq rose 1.24%. Australia’s S&P/ASX 200 advanced 0.78%.
S&P 500 futures rose 0.3%, and Nasdaq futures were up 0.4%. Despite a near 2% decline in the S&P 500 last week and a 1.8% drop for the Nasdaq, the latter remains up 30% for the year.
On Friday, the Dow Jones Industrial Average gained 497.22 points, or 1.17%, to 42,839.46. The S&P 500 rose 63.93 points, or 1.09%, to 5,931.01, and the Nasdaq Composite increased by 199.83 points, or 1.03%, to 19,572.60.
European stocks experienced their worst week in over three months, spooked by comments from former President Donald Trump regarding potential tariffs on the European Union. MSCI’s global stock index rose 8.20 points, or 0.98%, to 847.61. However, the STOXX 600 fell by 0.88%, and the FTSEurofirst 300 dropped by 19.25 points, or 0.96%.
BofA analysts observed that while the S&P 500 was up 23% for the year, excluding the 12 largest companies, the gain was only 8%. They warned that such concentration could be a vulnerability heading into 2025.
Wall Street surged on Friday after a key gauge of core US inflation came in lower than expected at 0.11%, offering some relief against the Fed’s earlier hawkish stance. Fed funds futures now imply a 53% chance of a rate cut in March and 62% in May, though they have priced in only two quarter-point cuts to 3.75-4.0% for all of 2025. Just a few months ago, markets had hoped for rates to bottom around 3.0%.
The outlook for fewer rate cuts, coupled with expectations of increased debt-funding government spending, has pressured bond markets, with 10-year yields rising nearly 42 basis points in just two weeks—the largest increase since April 2022.