STOCK NOW 6 things that changed for the stock market over...

6 things that changed for the stock market over the weekend – Gift Nifty, Assembly election results to dovish US Fed

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The Bharatiya Janata Party (BJP) won decisive majorities in the Hindi heartland states of Rajasthan, Madhya Pradesh and Chhattisgarh, which analysts believe could trigger positive market sentiment, raising hopes of political continuity post 2024 Loksabha elections.

On the global market front, Asian markets traded mixed while the US stocks ended higher on dovish commentary from Fed officials.

Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — December 4

The Indian equity market witnessed healthy gains on Friday, with the benchmark Nifty 50 hitting its fresh record high in the intraday session after India’s Q2 GDP numbers exceeded expectations.

The Sensex ended 492.75 points, or 0.74%, higher at 67,481.19, while the Nifty 50 rose 134.75 points, or 0.67%, to settle at 20,267.90.

“The outcome of state election results hints towards continued uprun in markets. While part of the outcome was discounted in advance, there is a scope for a further upmove discounting the positive surprises coming out from the results. Having said that, we could witness some profit taking at higher levels due to the end of a near term uncertainty,” said  Dhiraj Relli, MD & CEO, HDFC Securities.

Also Read: Assembly election results 2023: How will the Indian stock market react?

He believes if FPIs indulge in large short covering in F&O markets and increase momentum of buying in cash markets post these results, Nifty could keep rising at a healthy pace beyond a couple of days. 

“Markets will also look forward to fresh triggers from now (other than flows) till the middle of January even as a lot of FPIs will reduce their activity levels post December 15 due to year-end holidays,” Relli noted.

Also Read: Markets may open higher as F&O bears crash out

Here are key domestic and global market cues for Sensex today:

Asian Markets

Asian markets traded higher on Monday tracking gains on Wall Street and ahead of key economic data releases this week.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.6%.

South Korea’s Kospi was up 0.6% and the small-cap Kosdaq gained 0.53%. Japan’s Nikkei 225 fell 1% and the Topix declined 1.23%. Hong Kong’s Hang Seng index futures pointed at a stronger open.

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Gift Nifty

Gift Nifty was trading around 20,638 level as against Nifty futures’ previous close of 20,360, indicating a sharp gap-up opening for the Indian indices.

US Stock Market

The US stock market indices ended higher on Friday with the S&P registering its highest close of the year after remarks from US Federal Reserve Chair Jerome Powell boosted the view that key policy rates have peaked.

All three major US stock indexes gained, notching their fifth consecutive weekly percentage gains. 

Read here: US stock market ends higher as Powell raises peak rate hopes; S&P logs highest close of year

The Dow Jones Industrial Average rallied 294.61 points, or 0.82%, to end at 36,245.5, while the S&P 500 surged 26.83 points, or 0.59%, to 4,594.63 — its highest level since March 2022. The Nasdaq Composite closed 78.81 points, or 0.55%, higher at 14,305.03.

Among stocks, Pfizer shares plunged 5.1%, US-listed Alibaba shares fell 1.2%, while Marvell Technology declined 5.3%.

Ulta Beauty share price jumped 10.8%, while Paramount Global shares surged 9.8%.

Assembly Election Results

The Bharatiya Janata Party (BJP) comfortably won the assembly elections in three out of four states, beating the exit polls. The BJP has retained Madhya Pradesh (MP) with a strong two-thirds majority, and regained Rajasthan and Chhattisgarh from the Congress with a comfortable majority.

With the outcome overwhelmingly in favor of the incumbent BJP, analysts believe the confidence of the market in the current dispensation and political continuity post 2024 Loksabha elections will get a boost. Market sentiment is expected to strengthen further and with a stronger prospect of a pre-election rally.

Read here: Brand Modi delivers ‘jaadu’ in state elections: Ten key takeaways from Assembly Election Results 2023

To move ‘carefully’ on interest rates, says Chair Jerome Powell

US Federal Reserve Chair Jerome Powell on Friday reaffirmed the central bank’s intent to remain cautious on interest rates but also said that the hoped-for “soft landing” of the US economy seemed to be falling into place.

Powell said that the US monetary policy was slowing the economy as expected with a benchmark overnight interest rate “well into restrictive territory”, while noting that a key measure of inflation averaged 2.5% over the six months ending in October, near the Fed’s 2% target, Reuters reported.

Read here: US Federal Reserve to move ‘carefully’ on interest rates, says Chair Jerome Powell; notes easing inflation

Gold price today

Gold prices hit a record led by softening US economic data and dovish commentary by Fed officials that raised expectations for rate cuts early next year.

Gold rate rose as much as 3.1% to $2,135.02 an ounce in early trading on Monday surpassing all-time high it set on August 7, 2020, in the midst of the pandemic.

(With inputs from Agencies)

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Updated: 04 Dec 2023, 07:15 AM IST

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