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Stocks poised for lower start

Published on May 07, 2024 08:19

GIFT Nifty:

Trading of Nifty 50 index futures on the GIFT Nifty indicates that the Nifty could fall 17.50 points at the opening bell.

On 7 May 2024, the Lok Sabha elections will enter their third phase with voting in 96 parliamentary constituencies across 12 states such as Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Uttar Pradesh, and West Bengal. The BJP is seeking a third consecutive term, facing opposition from a coalition named the Indian National Developmental Inclusive Alliance (INDIA), which includes the Congress party. This round is part of a seven-phase election process running from April 19 to June 1, with the final election results scheduled to be revealed on June 4.

Global markets:

Asian stocks rose on Tuesday, fueled by continued optimism that U.S. interest rates will eventually decline. Indexes in Japan and South Korea led the gains, catching up to previous advances in other markets. Later in the day, the Reserve Bank of Australia meeting will be a key focus, with analysts expecting the central bank to maintain interest rates but adopt a more hawkish stance.

The positive sentiment stemmed from Wall Street`s performance on Monday, particularly the technology sector`s rise after a string of strong first-quarter earnings reports. U.S. stocks closed higher overall, buoyed by the expectation of a Federal Reserve interest rate cut later this year. The Dow Jones Industrial Average gained 0.5%, the S&P 500 rose 1%, and the Nasdaq Composite climbed 1.2%.

Domestic markets:

The domestic equity benchmarks ended almost flat on Monday. The S&P BSE Sensex, a barometer index, managed a marginal gain of 0.02%, closing at 73,895.54. However, the Nifty 50 index, representing the 50 largest companies, inched down by 0.15%, settling at 22,442.70.

Volatility continued to grip the market, with the India VIX, a key volatility gauge, surging over 13%. PSU banks bled heavily, dropping over 3.6%, in reaction to the Reserve Bank of India`s proposed stricter lending norms for infrastructure and development projects. Profit booking and valuation concerns also weighed on the broader market, leading to significant selling pressure across sectors.

Foreign portfolio investors (FPIs) sold shares worth Rs 2,168.75 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 781.39 crore in the Indian equity market on 6 May 2024, provisional data showed.

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