5 things that changed for the stock market overnight
The Asian markets traded higher, while the US stock market ended in the green overnight after dovish comments from US Federal Reserve officials decreased the odds of further interest rate hikes by the central bank.
Investors remain watchful of the Israel-Hamas war in the Middle East and its impact on the global financial markets.
On Monday, the domestic equity indices snapped their two-day winning run to end with significant losses as the ongoing Israel-Palestine war spooked investors. The Nifty 50 closed at 19,512.35, down 141 points, or 0.72% and the Sensex ended the day with a loss of 483 points, or 0.73%, at 65,512.39.
“In the near term, we expect markets to remain volatile amid geopolitical stress and inflationary pressure ahead of CPI data to be released by the US, Europe, and China later during the week,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
Also Read: Global markets today: Oil prices jump, investors shun stocks
Here are key global cues from Sensex today:
Asian Markets
Asian markets traded higher on Tuesday following overnight gains on Wall Street.
Japan’s Nikkei 225 rallied 2% and the Topix gained 1.9%. South Korea’s Kospi jumped 1.64%, while the Kosdaq rose 0.71%.
Hong Kong’s Hang Seng index futures traded higher at 17,658, compared with the HSI’s close of 17,517.4.
Australia’s S&P/ASX 200 surged 1.1%.
Meanwhile, Gift Nifty was trading around 19,620 level as compared to Nifty futures’ previous close of 19,522, indicating a gap-up start for the Indian benchmark indices.
Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — October 10
Wall Street
The US stock market indices reversed earlier losses to end higher on Monday amid dovish comments from the US Federal Reserve officials.
The Dow Jones Industrial Average rallied 197.07 points, or 0.59%, to 33,604.65, while the S&P 500 gained 27.16 points, or 0.63%, to 4,335.66. The Nasdaq Composite ended 52.90 points, or 0.39%, higher at 13,484.24.
Among stocks, United Airlines, Delta Air Lines and American Airlines ended down more than 4% each.
Defense stocks rallied, with the S&P 500 Aerospace & Defense index ending up 5.6%. Northrop Grumman jumped 11.4% and L3Harris Technologies surged 9.96%.
The US bond market was shut on Monday for Columbus Day.
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Dovish Fed
Comments from two US Federal Reserve officials turned around the rate forecasts overnight after noting the recent selloff in bonds might negate the need for further hikes, Reuters reported.
“If long-term interest rates remain elevated because of higher term premiums, there may be less need to raise the Fed funds rate,” said Dallas Fed president Lorie Logan — a notable shift from previously hawkish rhetoric.
Fed Vice Chair Philip Jefferson said the central bank would need to “proceed carefully” given the recent rise in yields. Futures-implied pricing for the chance of another Fed hike this year fell from above 40% last week to about 26% on Monday, Reuters reported.
Also Read: Israel-Hamas war impact: Oil prices dip; gold prices surge amid the turmoil
Country Garden warns it could fail to pay offshore debt obligations
China’s Country Garden Holdings said it might not be able to meet all of its offshore payment obligations when due or within the relevant grace periods, as the country’s largest private property developer grapples with debt restructuring, Reuters reported.
In a note shared on the Hong Kong Stock Exchange website, the firm said it “expects that it will not be able to meet all of its offshore payment obligations when due or within the relevant grace periods, including but not limited to those under the US dollar notes issued by the Company”.
Dollar softens, Treasuries gain
The US dollar softened on Tuesday along with US interest rate expectations and a fall in Treasury yields as investors detected a slight dovish shift in Federal Reserve officials’ tone.
Benchmark 10-year Treasuries made their sharpest rally in more than a month at the open in Tokyo on Tuesday on a combination of dovish Federal Reserve remarks and demand for safe assets following violence in the Middle East, Reuters reported.
After dropping 15 basis points at the open, 10-year yields were 12.5 bps lower at 4.66%. Two-year yields also dived more than 13 bps to a one-month low of 4.926% as short-term rate expectations were dialled back.
(With inputs from Reuters)
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Updated: 10 Oct 2023, 07:09 AM IST
