Bombay Stock Exchange on Diwali night
By S Jha
New Delhi, November 14: The US indices were trading two per cent or more higher in the afternoon trade on Tuesday on the back of the consumer prices rising 3.2 per cent in October against 3.7 per cent earlier. The cooling of the consumer prices takes the proverbial monkey off the back of the investors who had been dreading the Federal Reserves actions while the interest rates remain at multi-year high.
Dow Jones was trading with a gain of over 500 points. NASDAQ was higher by more than two per cent while other US indices were trending up. The Indian stock markets were closed on Tuesday for holiday. The Indian indices are likely to open with gap up tomorrow morning if they follow the global cues.
The bond yields in the US also have moderated after the release of the consumer price data which came at a multi-month low. This was in line with the Indian consumer prices also heading down, which in October came at 4.7 per cent. Crude oil was trading slightly higher after the recent crash.
Amid the Middle East geostrategic situations largely contained with least likelihood of the war flaring up beyond Gaza, the global cues are now appearing favourable for the equity markets. Nifty after correcting by more than 1100 points has so far recovered grounds partially. The Nifty in the current rise has gained close to 550 points and the index still has a long way to go to cover the full length of the correction.
The Indian indices are moving in tandem with the US peers. Dow Jones is also close to 800 points away from the all-time peak. The bulls in India may take confidence from the fact that NASDAQ is stronger than Dow Jones which may nudge the Indian IT scrips to wake up. Incidentally, the IT stocks have been laggard with the large caps trading at heavy discounts from their all-time highs.
The equity markets globally may also take confidence from the cooling of the tension between China and the US as Xi Jinping and Joe Biden hold summit meeting tomorrow to manage their relations and cut the risks of further deteriorations in the ties. Incidentally, US-China trade war has also been a negative factor for the global equity markets.
About The Author
