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The Indian stock markets are poised for a positive start on Thursday, August 1st, fueled by a strong performance in global markets. The GIFT Nifty futures, an early indicator of the Nifty50 index, are currently up 92.85 points, representing a 0.37% increase, suggesting a bullish sentiment for the day ahead. Several key factors are influencing this optimistic outlook for the Indian markets, including the US Federal Reserve's recent decision on interest rates and the surge in commodity prices.
The US Federal Reserve (Fed) has left interest rates unchanged at a 22-year high of 5.25% to 5.5%. This decision comes after inflation continued to cool, albeit remaining somewhat elevated. The Fed's policy statement reflected a positive shift from its June meeting, with stronger language indicating some progress towards its 2% inflation target. This suggests a potential rate cut might be on the horizon, possibly as early as September. While the Fed's chair, Jerome Powell, clarified that no decisions have been made regarding future meetings, including the September one, he did acknowledge that the committee is moving closer to the point where it might be appropriate to lower the policy rate.
Adding to the positive sentiment, crude oil prices have surpassed the $81 mark, while metal prices have experienced a significant surge, ranging from two to four percent. This rise in commodity prices is likely to benefit companies involved in the metal and energy sectors, potentially boosting their share prices. Corporate earnings are another crucial factor that will influence the market's performance. Strong earnings reports could further fuel bullish sentiment, while underwhelming results might dampen investor enthusiasm.
Despite the generally positive outlook, it's important to note the recent trend in foreign institutional investor (FII) activity. FIIs have sold consecutively for the past three days, which could be a slight cause for concern. However, domestic institutional investors (DIIs) have been buying for seven consecutive days, suggesting strong domestic confidence in the market. This interplay between FII and DII activity will be worth monitoring in the coming days.
Overall, the Indian stock markets are likely to open higher on Thursday, driven by a combination of factors including global market strength, the Fed's potential rate cut hint, and the rise in commodity prices. However, it is essential to remain cautious and keep track of developments related to corporate earnings, FII/DII activity, and the overall macroeconomic environment for a complete picture of market movement.
Source: Sensex, Nifty likley to open higher amid strength in global stocks ,Markets News, Business News