Indian stocks are anticipated to commence trading higher on Thursday, following the positive momentum from U.S. stocks, which embarked on their annual Santa Claus rally beginning Tuesday. This rally traditionally unfolds over the last five trading days of the year and the first two of January.
However, the Sensex and Nifty benchmarks might experience restrained movement, especially after Monday's recovery from their steepest decline in two and a half years. The upcoming expiration of Nifty 50 contracts could also contribute to some intra-day volatility.
In recent sessions, foreign institutional investors continued to sell, shedding shares worth Rs. 2,454 crores in the cash market. Meanwhile, domestic financial institutions took a buying stance, acquiring shares worth Rs. 2,819 crores, based on provisional figures.
On Tuesday, Sensex and Nifty indexes fluctuated but ultimately closed slightly down ahead of the Christmas holiday. Concurrently, the rupee depreciated for the sixth straight session, settling at Rs. 85.20 per dollar, primarily driven by the month-end demand from importers and increasing U.S. Treasury yields.
In the Asian markets, trading was varied amid reduced holiday activity; Chinese and Seoul stocks declined, while Japan’s Nikkei gained approximately 0.5 percent. This uptick followed Bank of Japan Governor Kazuo Ueda's decision against signaling a forthcoming interest rate hike. Additionally, China's central bank maintained its one-year medium-term lending facility rate at 2 percent and executed its most significant cash withdrawal since 2014 using a one-year policy mechanism.
Several regional markets remained closed in observance of the Boxing Day holiday.
In the United States, key Wall Street indices ended higher in a shortened session on Christmas Eve, buoyed by leading technology stocks. The Dow climbed 0.9 percent, the Nasdaq Composite advanced by 1.4 percent, marking four consecutive days of gains and thus initiating the Santa Claus rally. The S&P 500 increased by 1.1 percent, extending its winning streak to three days.
European equities managed slight progress in light pre-holiday trading on Tuesday, with the pan-European STOXX 600 inching up 0.2 percent. France’s CAC 40 rose by 0.1 percent, and the U.K.’s FTSE 100 edged up 0.4 percent, while markets in Germany and Switzerland were closed for Christmas Eve.
The material has been provided by InstaForex Company -
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