MIXED ASIAN CUES MAY RESTRICT GAINS IN DOMESTIC STOCKS

GIFT Nifty:

The GIFT Nifty October futures contract is down 9 points, suggesting a flat-to-negative start for the Nifty 50.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 1,209.10 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 6,886.65 crore in the Indian equity market on 27 September 2024, provisional data showed.

FPIs have bought shares worth over Rs 25,215.25 crore in September 2024 (so far). They sold shares worth 21,368.51 crore in August 2024.

Global Markets:

Asian stocks were mixed on Monday as Middle East tensions offset China`s stimulus measures. The Nikkei plunged on concerns about Japan`s new prime minister favoring higher interest rates.

The Shanghai Composite surged over 4%, extending last week`s 13% rally. China`s central bank announced plans to reduce mortgage rates for existing home loans by the end of October, likely by an average of 50 basis points. This move is part of Beijing`s largest stimulus package since the pandemic, which includes a range of monetary, fiscal, and liquidity support measures.

Despite the stimulus, China`s Caixin Manufacturing PMI declined from 50.4 in August to 49.3 in September, indicating a return to contraction. The manufacturing sector deteriorated in September after improving the previous month.

Meanwhile, ongoing Israeli strikes in Lebanon increased geopolitical uncertainty.

In the United States, the Dow closed at a record high on Friday, shrugging off tech sector volatility. Surging energy stocks and signs of cooling inflation boosted investor sentiment.

The 30-stock Dow Jones Industrial Average gained 0.3%, reaching a new closing record of 42,313. The benchmark S&P 500 fell 0.2%, and the tech-heavy Nasdaq Composite was down 0.4%.

The US Personal Consumption Expenditures index, the Fed`s preferred inflation measure, showed that annual inflation decreased to 2.2% in August from 2.5% the month before. Fed Chair Jerome Powell is scheduled to deliver a closely watched speech on Monday.

Domestic Market:

The domestic equities closed slightly lower on Friday, snapping a recent rally fueled by the U.S. interest rate cut. Energy, healthcare, and pharma sectors led the gains, while media, real estate, and private banks lagged. Despite the minor setback, the market`s overall upward momentum remains strong, supported by ample domestic liquidity.

In the barometer index, the S&P BSE Sensex slipped 264.27 points or 0.31% to 85,571.85. The Nifty 50 index lost 37.10 points or 0.14% to 26,178.95. The Sensex and Nifty clocked an all-time high of 85,978.25 and 26,277.35, respectively in mid-morning trade.

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