Nifty Index, US Fed, Oil Prices Impact Microsoft, Google, Meta Earnings: Overnight Market Updates

Indian Stock Market Indices Expected to Open Lower on Thursday

The Indian stock market benchmark indices, Sensex and Nifty 50, are anticipated to open lower on Thursday, following a decline in global markets. Weakness in global markets was triggered by a stalemate in US-Iran peace talks, which led to a surge in crude oil prices. The US Federal Reserve's hawkish pause also contributed to the decline. Asian markets traded lower, while the US stock market ended mixed after the US Fed policy and big tech earnings.

On Wednesday, the Indian stock market retreated sharply from the day's highs but ended higher. The Sensex jumped 609.45 points, or 0.79%, to close at 77,496.36, while the Nifty 50 settled 181.95 points, or 0.76%, higher at 24,177.65.

Market Outlook

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Markets are expected to remain volatile and event-driven in the near term, with reactions to exit poll outcomes expected to guide sentiment ahead of the final election results next week. The ongoing earnings season, elevated crude oil prices, currency movement, and developments in US-Iran negotiations will continue to remain key overhangs.

Global Market Cues

US Market Performance

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The US stock market ended mixed after the US Federal Reserve's interest-rate decision and rising crude oil prices. The Dow Jones Industrial Average declined 280.12 points, or 0.57%, to 48,861.81, while the S&P 500 fell 2.82 points, or 0.04%, to 7,135.98.

US-Iran War and Crude Oil Prices

US President Donald Trump told Axios that he will not lift a naval blockade of Iran's ports until he secures a deal with Tehran to address the country's nuclear program, extending a standoff over the Strait of Hormuz that has caused a global energy crisis.

Crude oil prices extended gains as talks to end the US-Iran war have deadlocked. Brent crude futures for July contract rose 0.85% to $111.38 a barrel, after gaining 5.8% in the previous session. US West Texas Intermediate futures for June gained 0.59% to $107.51 a barrel, after climbing 7% in the previous session.

Earnings Reports

• Microsoft reported revenue of $82.9 billion, up 18% YoY, while net income rose 23% to $31.8 billion.
• Alphabet's total revenue rose 22% to $109.9 billion in the first quarter, above an estimate of $107.2 billion.
• Amazon's Q1 revenue increased 17% to $181.5 billion, while operating income rose to about $23.9 billion compared with $18.4 billion a year earlier.
• Meta reported first-quarter net income of $26.8 billion, while its revenue was $56.31 billion, beating the LSEG-compiled analysts' average estimate of $55.45 billion.

Treasury Yields and Bond Yields

The hawkish shift of the US Fed sent treasury yields sharply higher. The 2-year note yield rose to 3.928%, while the benchmark US 10-year Treasury yields climbed to 4.421% — both their highest levels since March 27. Benchmark Japanese government bond (JGB) yields rose to a 29-year high after the US Fed signalled growing concerns about inflation, while oil prices jumped.

Gold Price and Dollar

Gold prices rebounded from a one-month low hit the day before, helped by a softer US dollar. Spot gold price rose 0.6% to $4,566.73 per ounce, after falling to its lowest level since March 31 in the previous session. The dollar hovered near its highest in more than two weeks, with the dollar index steady at 98.852 following a 0.3% gain on Wednesday.