Benchmark indices, Sensex and Nifty 50, are expected to open on a positive note on Wednesday, supported by a mixed trend in global markets.

While most Asian markets traded in the green, US indices closed mixed following the release of inflation data. Moreover, traders are now pricing in a delay in US Federal Reserve rate cuts, expecting the first move in September, with two 25-bps reductions anticipated by the end of the year.

On Tuesday, domestic markets witnessed a sharp correction as investors booked profits following a nearly 4% surge in the previous session.

Domestic Market Recap

On Tuesday, Indian indices closed in the red, as investors moved towards booking their profits:

• Sensex slumped by 1,281.68 points (-1.55%) to close at 81,148.22
• Nifty 50 moved down by 346.35 points (-1.39%) to settle at 24,578.35

Gift Nifty

Gift Nifty was trading near 24,735, around 95 points higher than the previous Nifty futures close, hinting at a positive start for Indian markets.

Wall Street Performance

US indices saw mixed movement:

• Dow Jones: 269.67 pts (-0.64%) to 42,140.43
• S&P 500: 42.36 pts (0.72%) to 5,886.55
• Nasdaq closed 1.61% higher by 301.74 at 19,010.09

Gold Prices

Gold declined as US-China trade softened, causing the gold market to weaken.

• Spot gold fell by 0.1% to $3,246.21/oz 
• US gold futures slipped by 0.1% to $3,250.50

Crude Oil Prices

• Brent crude slumped by -0.44% to $66.34/barrel
• US West Texas Intermediate (WTI) crude: -0.42% to $63.40/barrel

Major Global Events Driving Sentiment

1. US Inflation: Consumer prices in the United States rose modestly in April, marking the smallest annual gain in four years. The Consumer Price Index (CPI) increased by 0.2% last month following a 0.1% decline in March, the first drop since May 2020. This came in slightly below Reuters’ forecast of a 0.3% rise. On a yearly basis, CPI inflation stood at 2.3% in April, easing from 2.4% in March.
2. India CPI Inflation: India’s retail inflation slowed significantly in April, reaching its lowest level in over six years. Consumer Price Index (CPI)-based inflation rose by 3.16% year-on-year, compared to 3.34% in March, 3.61% in February, and 4.83% in April 2024.
3. MSCI Index Changes – May Review: Coromandel International and FSN E-commerce Ventures (Nykaa) are set to join the MSCI India Index, part of the MSCI Global Standard Index, with no removals announced. In the MSCI India Domestic Smallcap Index, 12 new stocks will be added while 21 will be removed. These adjustments will take effect after market close on May 30, 2025, according to MSCI.

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