Asian markets traded lower while the US stocks ended in the red overnight after the US Federal Reserve meeting minutes indicated interest rates will remain elevated for longer.
Spike in crude oil prices amid increasing geopolitical tensions in the Middle East is also likely to weigh on sentiment.
The benchmark indices closed lower for the second consecutive session on Wednesday as investors took profits in high-valuation stocks.
The Sensex fell 535.88 points, or 0.75%, to close at 71,356.60, while the Nifty 50 ended 148.45 points, or 0.69%, lower at 21,517.35.
“We expect the market to consolidate and take a pause before the quarterly results starts, leading to more stock-specific action,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — January 4
Here are key global market cues for Sensex today:
Asian Markets
Asian markets traded lower on Thursday led by Japan, following a sharp decline overnight in Wall Street indices
Japan’s Nikkei 225 plunged 2.26% and the Topix dropped 1.25% on the first trading day of 2024. South Korea’s Kospi fell 0.64%, while Kosdaq declined 0.69%. Hong Kong’s Hang Seng index futures pointed to a rebound.
Australia’s S&P/ASX 200 lost 0.5%.
Gift Nifty
Gift Nifty was trading around 21,620 level, as compared to Nifty futures’ previous close of 21,595, indicating a flat-to-positive opening for the Indian stock market indices.
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US Stock Market
The US stock market indexes ended lower on Wednesday amid extended profit-taking after a strong finish to 2023, with minutes from the US Federal Reserve’s December meeting failing to cheer markets.
The Dow Jones Industrial Average dropped 284.85 points, or 0.76%, to 37,430.19, while the S&P 500 declined 38.02 points, or 0.8%, to end at 4,704.81. The Nasdaq Composite ended 173.73 points, or 1.18%, lower at 14,592.21.
Among stocks, rate-sensitive megacap stocks fell, with Nvidia , Apple and Tesla ending down between 0.7% and 4%. Citigroup shares rose 1.1%.
US Federal Reserve Minutes
The US Federal Reserve officials appeared increasingly convinced at their meeting last month that inflation was coming under control, with “upside risks” diminished and growing concern about the damage that “overly restrictive” monetary policy might do to the economy, according to minutes of the central bank’s December 12-13 policy meeting, Reuters reported.
Read here: Fed Minutes highlight ‘diminished’ inflation risks; here are key takeaways
Japan’s factory activity
Japan’s factory activity contracted at the steepest pace in 10 months in December. The final au Jibun Bank Japan manufacturing purchasing managers’ index (PMI) shrank to 47.9 in December from 48.3 in November. It was the weakest reading since the index hit 47.7 in February.
Apple shares slump
Apple share price tanked nearly 5% in the last four consecutive trading days, leading to the slump that erased roughly $370 billion in market value. Apple shares have been weighed down after Barclays Plc analysts early this week downgraded shares of the tech giant to underweight, saying they expect soft demand for iPhones going forward.
Read here: Apple’s stock nightmare, erases $370 billion in market value in past 4 days
Oil prices jump
Crude oil prices jumped following supply disruptions in Libya and increased tensions in the Middle East.
Brent crude oil rose 0.22% to $78.42 a barrel, after climbing more than 3% on Wednesday, while the US West Texas Intermediate (WTI) crude gained 0.40% to $72.99.
US Dollar, Treasury yields
The US dollar rose to a two-week high on Wednesday, while the treasury yields hit 4% for the first time in two weeks.
The dollar index held gains and was up 0.2% at 102.45, after earlier touching a two-week peak of 102.61, while the 10-year yield declined to 3.90%, down 4.1 basis points (bps).
(With inputs from Agencies)
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Published: 04 Jan 2024, 07:21 AM IST