The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to remain under pressure on Wednesday, 18 August, amid rising crude oil prices and a sharp rise in global bond yields continue to weigh on investor sentiment
Asian markets traded lower on Wednesday, meanwhile, US stock futures were near the flatline.
On Tuesday, the unresolved crisis in West Asia and growing concerns over the impact of elevated crude oil prices on India’s macroeconomic outlook and corporate earnings continued to dampen investor sentiment. The benchmark Sensex tumbled 493 points, or 0.63%, to close at 77,235.46 on August 18. Meanwhile, the NSE’s Nifty 50 extended its losing streak to six consecutive sessions, falling 133 points, or 0.55%, to settle at 24,154.90.
“Markets remained under pressure on Tuesday, extending their losing streak for the sixth consecutive session amid weak global cues. After an initial decline, the Nifty remained in negative territory for most of the session and slipped below the crucial 24,200 mark to settle at 24,154.90, down around 0.5%. The Sensex also declined around 0.6% to close at 77,235.46.
Investor sentiment remained subdued as Brent crude climbed above $91 per barrel following the expiry of the temporary US-Iran ceasefire, with Iran adopting a more aggressive stance and the US ruling out an extension. The sharp rise in crude prices has renewed concerns over India’s inflation, the rupee and the current account. The rupee also weakened towards ₹95.68 per dollar, although RBI intervention helped limit the depreciation,” said Ajit Mishra – SVP, Research, Religare Broking.
Here are key global market cues for Sensex today:
Asian markets
Asia-Pacific markets began Wednesday on a weak note, with South Korea’s markets witnessing the sharpest declines.
The Kospi plunged 5.89% at the opening bell, while the small-cap Kosdaq dropped 3.62%, triggering a temporary trading halt. Major Kospi stocks, including Samsung and SK Hynix, declined by more than 7% and 5%, respectively.
Japan’s Nikkei 225 slipped 1.04%, while the broader Topix fell 1.01%. Australia’s benchmark S&P/ASX 200 also opened lower, declining 0.50%.
Gift Nifty today
Gift Nifty was trading around the 24,187 level, down nearly 42.60 points from the Nifty futures’ previous close, indicating a negative start for the Indian stock market indices.
Wall Street
US stock futures were largely unchanged on Tuesday night after the major indices recorded their third consecutive session of losses, as a global bond sell-off and rising oil prices continued to dampen investor sentiment.
Dow Jones Industrial Average futures edged up by 2 points, while S&P 500 futures remained flat. Nasdaq 100 futures, meanwhile, slipped 0.2%.
Wall Street ended the previous session in the red, with the Dow falling 116 points, or 0.2%. The S&P 500 declined 0.7%, while the Nasdaq Composite emerged as the biggest laggard, dropping 1.3%.
Asian technology stocks
Asian technology stocks declined on Wednesday, mirroring losses in their US counterparts as a sell-off in global bonds weighed on market sentiment.
In Japan, SoftBank Group fell 5.44%, while chip equipment manufacturer Tokyo Electron dropped 3.85%. Advantest declined 3.93%, and memory chipmaker Kioxia plunged 9.13%.
South Korean technology shares also came under pressure, with SK Hynix falling 8.66% and Samsung Electronics shedding 7.08%. Seoul Semiconductor slipped 4.33%.
Technology stocks have witnessed increased volatility in recent sessions, with South Korea’s semiconductor-focused market swinging sharply between significant declines and record highs.
Crude oil prices
Oil prices edged higher in early trade on Wednesday, extending gains for a fourth consecutive session amid supply concerns. Investors remained cautious as conflicting signals from Tehran and Washington created uncertainty over whether the Strait of Hormuz remains open to shipping.
Brent crude futures rose 26 cents, or 0.29%, to $91.28 a barrel, while US West Texas Intermediate crude gained 37 cents to trade at $85.31 a barrel.
Both benchmarks had settled on Tuesday at their highest levels since July 24, as fading hopes of a peace agreement between the United States and Iran continued to support oil prices.
US-Iran war
US President Donald Trump said on Tuesday that no negotiations were underway with Iran and maintained that the Strait of Hormuz remained open, contradicting Tehran’s claim that the strategically important shipping route was still closed.
The temporary ceasefire between the two sides expired on Monday. A senior Iranian official was quoted as saying by Reuters that, amid the diplomatic deadlock, Iran was shifting to a “fully offensive” military stance. However, no fresh attacks from either side were reported on Tuesday.
Amid concerns over access to the Strait of Hormuz, Iraq’s cabinet approved a new mechanism to export its crude oil through specialised international and domestic companies using multiple export routes. According to a government statement issued after the cabinet meeting, the contracts under the arrangement will be valid for three months beginning September 1.
Gold rate today
Gold prices moved higher in early Asian trading on Wednesday as U.S. Treasury yields retreated from their recent highs. Investors also remained focused on the upcoming release of the Federal Reserve’s meeting minutes.
Spot gold gained 0.2% to $4,342.33 per ounce, recovering slightly after declining nearly 2% in the previous session. Meanwhile, US gold futures for December delivery slipped 0.6% to $4,396.30.
