8 Major Market Shifts Over the Weekend – Gift Nifty, China’s Rate Cut, Gold at Record High and More

The Indian stock market, with benchmark indices Sensex and Nifty 50, is expected to open cautiously on Monday, reflecting mixed signals from global markets. Here’s a detailed look at eight key factors that changed over the weekend, potentially impacting the market this week:

Asian Markets:

Asian markets showed a mixed performance after China announced a cut in lending rates. Japan’s Nikkei 225 saw a slight dip, while the broader Topix also slipped by 0.11%. In contrast, South Korea’s Kospi edged up by 0.22%, although the Kosdaq faced minor losses. Hong Kong’s Hang Seng index hinted at a weak start as well.

Gift Nifty Update:

Gift Nifty, a key indicator of India’s market direction, was trading around the 24,925 mark. This represents a nearly 25-point discount from the previous close of Nifty futures, signaling that the Indian stock market might open on a weaker note.

Wall Street Gains:

On Friday, the US stock markets wrapped up the week on a positive note. Both the Dow Jones Industrial Average and the S&P 500 hit record highs. The Dow rose by 36.86 points to 43,275.91, while the S&P 500 gained 23.20 points to close at 5,864.67. Tech stocks led the rally, with Netflix’s stock price jumping by 11.1% to a new record. Other tech giants like Apple rose by 1.2%, and Nvidia’s shares increased by 0.8%. However, CVS Health shares plunged 5.2%.

China’s Lending Rate Cut:

China announced a cut in its key lending rates as part of efforts to stimulate its economy. The one-year loan prime rate (LPR) was reduced by 25 basis points to 3.10%, down from the previous 3.35%. The five-year LPR was also lowered by 25 basis points to 3.60%, compared to the earlier 3.85%. This move is expected to provide relief to businesses struggling with financial pressures and give a boost to the global economic outlook.

RBI Governor Comments on Rate Cuts:

Reserve Bank of India (RBI) Governor Shaktikanta Das made it clear that a rate cut isn’t likely anytime soon. He said that inflation is expected to rise in October before it starts to ease, and cutting rates at this point would be “premature” and potentially risky. His comments came during a fireside chat organized by Bloomberg News on Friday. The RBI’s cautious stance is aimed at managing inflation and ensuring stability in the Indian economy.

HDFC Bank’s Q2 Financial Results:

HDFC Bank announced its Q2FY25 results, reporting a 5.3% increase in standalone net profit, reaching ₹16,821 crore compared to ₹15,976 crore in the same period last year. The bank’s net interest income (NII) also grew by 10% year-on-year to ₹30,110 crore, up from ₹27,390 crore. Despite the positive growth, the bank’s core net interest margin (NIM) came in at 3.46% on total assets and 3.65% on interest-earning assets, slightly below expectations.

Gold Prices Hit Record High:

Gold prices surged to an all-time high on Monday as tensions in the Middle East and uncertainties surrounding the upcoming US elections fueled a rise in safe-haven assets. Spot gold rose 0.2% to $2,724.88 per ounce, after briefly touching a record high of $2,725.81 earlier in the day. US gold futures also climbed 0.4% to $2,740.00. Alongside gold, silver prices surged as well, hitting a near 12-year high.

Bitcoin Surges to a 3-Month High:

Bitcoin saw a significant boost, reaching its highest level in three months. The cryptocurrency traded at $69,400 on Monday, up by 0.8%, with a total increase of 18% since October 10. Analysts believe the recent price surge has been driven by improving prospects for Donald Trump in the US elections, as his administration is viewed as taking a more lenient approach towards cryptocurrency regulation.

Key Focus for the Week:

Market participants will closely watch for several triggers, including the next round of Q2 corporate earnings, geopolitical tensions in the Middle East, the flow of foreign funds, trends in crude oil prices, and other important domestic and global macroeconomic data. Although the Indian stock market rebounded on Friday after a three-day losing streak, experts believe consolidation could continue due to mixed global cues and the absence of significant domestic triggers. However, individual stock movements driven by quarterly earnings could create opportunities for investors.

Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd., noted that the market is likely to experience consolidation, but specific stock-based action will be observed as companies continue to release their earnings reports.

The combination of international market developments, macroeconomic shifts, and corporate earnings data will create a dynamic environment for traders and investors in the coming days.