Domestic stock markets had a weak start on Friday. The market opened in the green, but the indices could not maintain their gains and slipped into the red. However, the market was trading 53% higher. Nifty fell 40 points to around 25,850. Sensex was down 150 points. Bank Nifty also kept swinging between red and green marks. Mixed trading was seen in midcap and smallcap stocks. Amid the rise in global markets, Nifty was trading near 26,060 with a gain of 40 points in the morning. Nikkei gained more than 600 points, while Dow futures gained slightly.
The Dow and Nasdaq closed stronger on better corporate results and hopes of a US trade deal, while crude oil and gold also rose sharply on Russia-Ukraine tensions and US sanctions. On the domestic front, the government’s approval of defense acquisitions worth ₹79,000 crore is a significant positive news for defense companies. Despite cash selling by FIIs, significant short-covering in index and stock futures kept the market bullish. American markets closed strongly on the basis of positive results. The Dow rose 144 points and the Nasdaq rose 201 points. After two days of decline, the Nasdaq crossed the double century mark. The market remained strong due to gains in leading technology companies like Nvidia and Oracle. Strong results from Honeywell and American Airlines also supported the market.
Global sentiment positive on hopes of trade deal
A possible meeting between Trump and Xi Jinping at the Asia-Pacific summit in South Korea has raised hopes for a trade deal. US Consumer Price Index (CPI) data will also be released today, where the September CPI is estimated to have increased by 0.3% on a monthly basis. Better data could further strengthen sentiment regarding Fed policy easing.
Sharp rise in crude oil and gold
Crude oil rose nearly 5% to near $66 on US sanctions on Russian oil companies and expectations of rising demand from India. Due to increasing tension between Russia and Ukraine, there was a huge rise in gold and silver. In the domestic market, gold rose by ₹2,200 to above ₹1,24,100, while silver jumped by ₹3,000 to above ₹1,48,500.
FII-DII: Short covering dominates
FIIs sold ₹1,166 crore in the cash segment yesterday, but did huge short covering of ₹12,800 crore in the futures trade. Domestic funds again took a buying stance and bought shares worth ₹3,900 crore. Barring minor selling during Muhurat trading, DIIs were continuously buying for the last 40 days.
Major defense deals approved on the domestic front
The government has approved defense procurement proposals worth ₹79,000 crore. Indigenous defense equipment will be purchased on a large scale for the three armed forces. This decision can prove to be a big trigger for defense sector companies.
Look at today’s results
Dr Reddy’s and SBI Life will declare their results on Nifty. The market will also keep an eye on the results of Coforge and SBI Cards in the F&O segment. Meanwhile, Midwest, which was subscribed 88 times, will list today and is expected to make a strong debut.
