India’s benchmark equity indices, Sensex and Nifty 50, are expected to open higher on Tuesday, tracking positive momentum in Asian markets. Asian shares advanced, breaking a three-day losing streak, after the US markets rallied, bringing the S&P 500 index close to bull market territory.
Investors will keep a close eye on key triggers such as Q4 earnings, updates on global trade agreements, and any developments in India-Pakistan relations.
Domestic Market Recap
On Monday, Indian indices closed in the red:
- Sensex dropped by 271 points (-0.33%) to close at 82,059.42
- Nifty 50 moved down by 75 points (-0.30%) to settle at 24,944.45
Gift Nifty
Gift Nifty was trading near 25,076, around 85 points higher than the previous Nifty futures close, hinting at a positive start for Indian markets.
Wall Street Performance
The US stock market closed flat, with futures on the S&P 500 inched up less than 0.1%, while Nasdaq 100 futures dipped 0.1%. Meanwhile, Dow Jones Industrial Average futures gained 54 points, or 0.14%.
Gold Prices
Gold prices edged lower as the initial safe-haven demand, sparked by Moody’s downgrade of the US credit rating, began to fade. Market attention shifted back to improving trade relations between the US and China, the world’s two largest economies.
After rising 0.8% on Monday, gold was hovering around $3,220 per ounce. A broadly positive mood in global markets, with Asian equities likely to mirror Wall Street’s gains, pressured gold prices, which typically rise during periods of economic uncertainty.
Crude Oil Prices
Oil prices held steady after a two-day rally, as traders weighed signs that President Trump may be scaling back efforts to mediate the Russia-Ukraine conflict.
US Dollar
Mounting concerns over trade tensions, expanding fiscal deficits, and waning confidence in the US economy’s long-term outlook have weighed heavily on American assets, particularly the US dollar.
The greenback has become less appealing to investors as its value slips from earlier highs. The US dollar index has fallen by up to 10.6% since its January peak, marking one of the sharpest three-month declines.
CFTC data shows that speculators now hold net short positions worth $17.32 billion, reflecting the most bearish sentiment on the dollar since July 2023.
Moody’s Downgrades US Credit Rating
Moody’s has lowered the United States’ long-standing sovereign credit rating by one notch, citing concerns over the ballooning national debt, which now stands at $36 trillion. The rating was downgraded from “Aaa” to “Aa1”, while the outlook was revised from “negative” to “stable.”
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