World stock market update: The US stock market continued to trade weakly on Wednesday as concerns about a financial crisis in the US grew as the share price of Credit Suisse fell by nearly 24%. In early Thursday am trades, the dollar index recovered to 104 levels and maintained above the psychological levels. The price of gold continued to grow despite the strengthening US dollar, and it nearly reached a lifetime high on the Multi Commodities Exchange of 58,847 per 10 gm (MCX). SGX Nifty today opened lower but quickly gained upward momentum and rose to an intraday high of 17,144 levels, showing hints of some relief rally on Dalal Street.
On the cause of gloomy feeling on the global stock market, “An uneasy calm fell on the world markets on Wednesday,” said Deepak Jasani, Head of Retail Research at HDFC Securities. “Efforts by regulators and financial executives to ease contagion fears sparked by the collapse of Banks in the US improved sentiments, though investors seemed unsure about how long this will last.”
The following is a list of significant global market triggers that could affect today’s Indian stock market:
US stock exchange
S&P 500 index increased 0.70 percent, while Dow Jones index declined 0.87 percent on Wall Street. But, the Nasdaq index, which is heavily weighted in technology, saw some buying interest and finished 0.05% higher.
Asia’s stock exchanges
On Thursday, the Shanghai index rose 0.60 percent, the Hang Seng increased by more than 1.50 percent, and the South Korean KOSPI fell by 0.08 percent during the early morning session. The Japanese Nikkei fell by 0.91 percent.
Today’s SGX Nifty
The SGX Nifty today opened down but quickly garnered buying activity, rising to an intraday high of 17,144 levels, signalling some relief rally on Dalal Street.
Anuj Gupta, Vice President — Research at IIFL Securities, said, “This market is an ideal sell on rise market where one is advised to sell around resistance levels and book profit near support as 16,800 is immediate support for the index while 17,050 and 17,200 are two crucial resistance for SGX Nifty today.
Crisis at Credit Suisse
On Wednesday, the share price of Credit Suisse fell to a new record low for the second straight day as its key shareholders decided against investing more money in Switzerland’s second-largest bank. Following an upward opening on Wednesday morning deals at 2.28 Swiss Frank per share, the share price of Credit Suisse sharply declined and fell below 2 Swiss Frank within hours of trade before reaching a new all-time low of 1.55 Swiss Frank. At 1.70 Swiss Franks per share, the share price of Credit Suisse finished more than 24% lower.
dollar to rupee
On Wednesday, the US dollar resumed trading above the psychological mark of 104. Despite some profit taking throughout Thursday’s trading, the Dollar Index maintained above 104 levels in morning deals.
Anuj Choudhary, a research analyst at Sharekhan by BNP Paribas, commented on the US dollar to INR exchange rate, “Due to risk aversion in global markets and anticipation of a recovery in the value of the dollar, we anticipate Rupee to trade with a negative bias. New FII outflows could potentially hurt the rupee. The likelihood of a 25-bps rate increase by the Fed at its FOMC meeting next week is increasing. Data on India’s trade balance as well as the US’s Empire State Manufacturing Index, PPI, and retail sales statistics may serve as indicators for traders. Amid worries about the American banking crisis spreading, investors might choose to exercise caution. The predicted trading range for the USDINR spot price is between 82 and 83.”
rate of gold today
When gold reached an intraday high of 58,661 levels on MCX, it was almost at its lifetime high of 58,847 per 10 gm. Nonetheless, the precious metal recorded a 1.50 percent increase on Wednesday, finishing at 58,338 per 10 gm levels. The price of gold has decreased on the international spot market by around 0.41 percent to levels of $1,910 per ounce.
yield on US bonds
US 30 year bond yield was down 0.42 percent at 3.672 levels in the early morning session compared to US 10 year bond yield, which was down 0.21 percent at 3.487.
Source: Team CurrencyVeda