Sensex and Nifty are set for a solid start as US recession concerns ease.

Sensex and Nifty Poised for Strong Opening as US Recession Fears Subside

Written by: Supriya Kadu

Edited by: Omkar Devadkar

Last Updated: August 09, 2024

Summary: Foreign institutional investors were net sellers of domestic equities for the fifth consecutive session on Thursday, selling shares worth Rs 22,857 crore.

The Indian equity indexes are expected to open higher on Friday, matching advances in other Asian markets after recent US labor market statistics helped assuage concerns about a possible recession in the world's largest economy.

The Gift Nifty increased by 1.2%, or 299 points, to 24,399 as of 8:10 a.m., indicating that the benchmark Nifty 50 is probably going to begin higher than its previous close of 24,117 on Thursday.

The MSCI Asia ex-Japan index rose 1.6% to start the day on a high note for Asian markets. Overnight gains were also seen on Wall Street as worries about an oncoming recession were eased by weekly U.S. unemployment claims that were fewer than anticipated.

Early in the week, concerns about a US recession were raised by the July employment report, which caused a strong sell-off in global markets, including those in India. This week, the Nifty 50 and the S&P BSE Sensex have both dropped by roughly 2.5%. Due to the Reserve Bank of India's continued aggressive policy approach in response to persistently rising food inflation, both indices saw a 0.75 percent decline on Thursday.

"Volatility has eased a bit through the week after spiking on Monday," said Motilal Oswal Financial Services, Senior Vice President of Equity Derivatives, Chandan Taparia.

The Nifty volatility index eased to 16.6 by the previous end after peaking at a two-month high of 23.15 on Monday. "The peak in India VIX suggests some stability and support-based buying at lower levels," Taparia stated.

Information technology companies, which draw a substantial percentage of their revenue from the United States, may see an increase as fears about the economy ease. The IT index fell around 2% on Thursday.

For the fifth consecutive session on Thursday, foreign institutional investors continued to be net sellers of domestic stocks, releasing shares valued at Rs 22,857 crore during this time. Institutional domestic investors bought $2.4 billion worth of shares in the interim.

Stocks to watch:

Life Insurance Corporation: The biggest insurance provider in the nation saw a 9.6% gain in first-quarter profit and projects a 2-3% increase in the value of new business margins for the fiscal year 2025.

Eicher Motors: Strong sales of high-end motorcycle models helped the Royal Enfield motorcycle manufacturer surpass earnings projections for the June quarter.

Ola Electric: With an issue price of Rs 76 per share, the electric mobility firm is scheduled to make its market debut on stock exchanges.

Cochin Shipyard: For the June quarter, the shipbuilder posted a profit gain.

Friday’s earnings highlight:

Aarti Industries, Alkem Laboratories, Bharat Dynamics, Bengal & Assam Co., Berger Paints India, CESC, Cholamandalam Financial Holdings, Concord Biotech, Electronics Mart India, Engineers India, General Insurance Corporation of India, Grasim Industries, Honasa Consumer, Inox India, Jubilant Foodworks, Kolte-Patil Developers, C.E. Info Systems, MMTC, Info Edge, Prism Johnson, Shipping Corporation of India, SJVN, Sun TV Network, Trent, and Zydus Lifesciences are among the businesses that have made earnings announcements.

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