STOCKS POISED FOR REBOUND AFTER SHARP DROP

GIFT Nifty:

GIFT Nifty futures point towards a 186 point jump for the Nifty 50 at the open.

Foreign portfolio investors (FPIs) sold shares worth Rs 10,073.75 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 9,155.55 crore in the Indian equity market on 5 August 2024, provisional data showed.

FPIs have sold shares worth over Rs 11,294.47 crore in August 2024 (so far). They bought shares worth 5407.83 crore in June 2024.

Global Markets:

Dow Jones Futures were up 312 points, indicating a bounce in the US stocks today.

Asian stocks surged on Tuesday, recovering from steep losses in the previous session. Japanese markets led the rally, bouncing back after plunging into bear market territory. Bargain hunting also fueled gains, as investors snapped up discounted stocks with solid fundamentals.

US stocks tumbled on Monday, triggered by recession fears. The Dow dropped 1,033.99 points, or 2.6%, to end at 38,703.27. The Nasdaq Composite lost 3.43% and closed at 16,200.08, while the S&P 500 slid 3% to end at 5,186.33.

Friday`s disappointing US jobs report intensified concerns about a potential recession. Investors are growing increasingly frustrated with the Federal Reserve`s reluctance to cut interest rates despite slowing economic growth. The central bank opted to maintain rates at a 22-year high during its last meeting.

Adding to market volatility, the unwinding of the yen carry trade is gaining momentum. After the Bank of Japan raised interest rates last week, narrowing the interest rate differential with the US, the yen strengthened against the dollar. This has forced investors to unwind positions that involved borrowing in yen to invest in higher-yielding assets.

Domestic Market:

Domestic shares tanked Monday, mirroring a global rout sparked by fears of a US recession. Worries over slowing economic growth, fueled by weak US jobs data, sent shockwaves through markets. The Nifty plunged below 24,100, with metal, media, and real estate stocks bearing the brunt. Geopolitical tensions in the Middle East and a unraveling yen carry trade added to the market`s woes. The barometer index, the S&P BSE Sensex slumped 2,222.55 points or 2.74% to 78,759.40. The Nifty 50 index tanked 662.10 points or 2.68% to 24,055.60.

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