Sensex, Nifty Seen Lower At Open

On the first trading session of the New Year 2025, Indian stocks are poised for a lower opening on Wednesday, as concerns continue over a stronger dollar and elevated U.S. Treasury yields. Nonetheless, the extent of these losses may be somewhat limited by the release of encouraging macroeconomic data.

Reports indicate that India's fiscal deficit has decreased to Rs 8.47 lakh crore for the April-November 2024 period compared to the previous year. Additionally, the output in the core infrastructure sector climbed to a four-month peak in November.

With global markets still closed for the New Year holiday, trading volumes are expected to remain light. On Tuesday, benchmark indices Sensex and Nifty managed to recover from early setbacks, closing with a slight negative bias.

The Indian rupee depreciated by 13 paise, concluding at a new record low of 85.65 per U.S. dollar, resulting in a 3 percent annual decline. This marks its seventh consecutive year of depreciation, primarily due to consistent foreign fund outflows.

Foreign Institutional Investors (FIIs) net sold shares worth Rs 4,645 crores on Tuesday, whereas domestic financial institutions purchased shares amounting to Rs 4,547 crores, according to provisional data from NSE.

Despite recent volatility, Sensex and Nifty enjoyed annual gains of 8.16 percent and 8.80 percent, respectively, reaching all-time highs on September 27.

Asian markets such as those in China, Japan, Australia, New Zealand, Taiwan, Hong Kong, and South Korea remain closed for the New Year 2025 holiday.

In the U.S., the 10-year Treasury yield rose by 3.4 basis points on Tuesday, reaching 4.579 percent, thus concluding the year with an over 60 basis point increase—its best annual gain in two years.

Crude oil prices saw an uptick on Tuesday, though they ended 2024 with a 3 percent annual loss—the second successive year of decline—due to ongoing concerns over global oil demand outlook, influenced by tepid Chinese economic growth and uncertainties regarding interest rate directions.

Gold, on the other hand, experienced one of its best years in a decade, posting a 26 percent annual rise, driven by central bank acquisitions and escalating geopolitical tensions.

U.S. equities closed lower overnight, yet managed to secure robust annual gains driven by technology stocks with AI exposure. The Dow edged slightly lower while the S&P 500 and the Nasdaq Composite dipped by 0.4 percent and 0.9 percent, respectively, marking a fourth consecutive session of losses amid enduring high yields and anticipated interest rate hikes.

The S&P 500 climbed 23 percent over 2024, marking its fifth rise in six years and achieving an over 20 percent increase for the second consecutive year. The Nasdaq rose nearly 30 percent, and the Dow increased by 13 percent over the year.

European equities advanced on Tuesday amid shortened trading sessions in London and Paris and with several markets closed for New Year's Eve. The pan-European STOXX 600 saw a 0.5 percent increase. France's CAC 40 rose 0.9 percent, and the U.K.'s FTSE 100 added 0.6 percent, while the German market remained closed.

The material has been provided by InstaForex Company - www.instaforex.com
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