Key Market Drivers: Overnight Developments in Indian Stock Market

Global Market Concerns Weigh on Indian Stock Market

The Indian stock market benchmark indices, Sensex and Nifty 50, are expected to open lower on Thursday, following a weak trend in the global markets. The ongoing conflict in the Middle East continues to weigh on investor sentiment, with Asian markets declining and the US stock market ending lower overnight.

The Indian stock market declined on Wednesday, resuming its losing run, but ended significantly off the day's low. The Sensex fell 303.67 points, or 0.41%, to close at 74,346.17, while the Nifty 50 settled 77.95 points, or 0.33%, lower at 23,405.60. The recent decline in the market highlights the increasing sensitivity of domestic equities to geopolitical developments, with investors closely tracking energy prices, ongoing US-Iran talks, FII flows, movements in the rupee for further direction, and the decisions of the RBI's Monetary Policy Committee meeting.

Global Market Cues

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Asian markets traded lower on Thursday, following overnight losses on Wall Street, as escalating US-Iran war stoked inflation worries. The Dow Jones Industrial Average declined 620.72 points, or 1.21%, to 50,687.07, while the S&P 500 dropped 56.06 points, or 0.74%, to 7,553.72. The Nasdaq Composite closed 239.92 points, or 0.89%, lower at 26,853.98.

US Stock Market Performance

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The US stock market ended lower on Wednesday, dragged down by financials and tech stocks, amid escalating tensions in the Middle East. The US-Iran war has stoked inflation worries, with crude oil prices elevated and most US regions experiencing higher inflation from late April to late May due to energy-related costs.

The Federal Reserve's Beige Book survey showed that the economy is bolstered by an AI investment boom but pinched by rising prices from the Iran war. US services sector activity picked up in May, with the Institute for Supply Management's nonmanufacturing purchasing managers index increasing to 54.5 last month from 53.6 in April.

Market Trading

Foreign institutional investors (FIIs) net sold Indian shares worth ₹5,616.56 crore on Wednesday, while Domestic Institutional Investors (DIIs) net purchased shares to the tune of ₹5,740.89 crore, as per provisional data available on the exchanges.

Gold prices gained, supported by lower crude oil prices and a weaker dollar. Spot gold price rose 0.4% to $4,450.16 per ounce, while US gold futures for August delivery gained 0.2% to $4,477. Crude oil prices fell after Israel and Lebanon agreed for a ceasefire agreement, raising hopes for a broader deal to end the US-Iran war.