Summary of this article
Wall Street’s main indices fell overnight on renewed concerns over stretched valuations in AI stocks
Asian equities slipped in morning trade as investors turned cautious ahead of BoJ’s decision on interest rates
Central banks in Europe, and the UK are set to announce their interest rate decisions later today
Crude oil jumped on fresh supply concerns following reports of fresh potential sanctions on Russian oil, Trump’s blockade of oil tankers from Venezuela
In the session on December 18, market participants are likely to track cues from the Wall Street, which fell on renewed concerns over stretched valuations in artificial intelligence (AI) stocks, Asian equities, which traded lower in early trade in anticipation of Bank of Japan's (BoJ) interest rate decision, crude oil prices, which jumped over fresh supply risk concerns, among other cues.
In the previous session on December 17, benchmark indices slipped amid mixed global cues.
Here are the opening cues that are likely to influence action on the D-Street on December 18.
Wall Street Falls On AI-Bubble Fears
US benchmark indices closed lower overnight amid renewed fears of an AI bubble. World's one of the most valuable companies, Nvidia, fell over 3.80 per cent after reports emerged that Google is intensifying its efforts to overtake Nvidia's AI chip market dominance. This triggered a wave of fall in AI stocks. Broadcom tumbled 4.48 per cent, Oracle plummeted 5.40 per cent and CoreWeave nosedived 7.12 per cent.
At close, the Dow Jones was at 47,885.97, down by 0.47 per cent. The S&P 500 closed at 6,721.43, lower by 1.16 per cent, and the tech-heavy Nasdaq Composite sank 1.81 per cent, settling at 22,693.32.
Asian Stock Markets Fall In Anticipation Of BoJ Rate Hike
Stocks in Asian markets largely fell in early trade on December 18, tracking cues from the Wall Street. Apart from the concerns over stretched valuation of AI stocks, market participants also seemed cautious ahead of BoJ's interest rate decision due on December 19. The Japanese central bank is expected to hike its benchmark rate by 25 basis points at its upcoming meeting, according to several media reports.
Japan's Nikkei 225 traded over 1 per cent lower, South Korea's Kospi was down by nearly 1.40 per cent, the Hong Kong-based Hang Seng, too, traded lower by nearly 0.50 per cent, and China's CSI 300 was down by around 0.60 per cent.
ECB, BoE Interest Rate Decisions
The European Central Bank (ECB) and the Bank of England (BoE) are scheduled to announce their interest rate decisions later today. Market participants will be watching closely for any changes in tone or guidance, as the outcomes are likely to shape global investor sentiment in the near term.
Rupee Opens Flat After Previous Day’s Rebound
The Rupee opened flat at 90.38 per US dollar on December 18 against its previous close. At the time of writing, the currency weakened to trade at 90.56 per US dollar. In the previous session, Rupee saw a sharp rebound after the Reserve Bank of India (RBI) intervened, selling US dollar aggressively in the local market.
US Dollar Index Flat
Meanwhile, the US dollar index, which measures the greenback against six major currencies of the world, held on the previous session's gains as market participants awaited central bank decision in the United Kingdom, Europe, and Japan.
At the time of writing, the US dollar index traded 0.04 per cent up at 98.41.
Crude Oil Price Today
Crude oil prices jumped in early trade on December 18 after reports emerged that the US is preparing for another round of sanctions on Russian oil in case Moscow does not agree for a peace deal with Ukraine. Fresh concerns over supply risk rose due to US President Donald Trump's ordering of a "blockade" of all sanctioned oil tankers entering and leaving Venezuela, which lent support to crude oil prices.
At the time of writing, Brent crude oil futures traded 0.67 per cent higher at $60.08 per barrel, and the West Intermediate Texas (WTI) crude oil futures was up by 0.73 per cent to trade at $56.22 per barrel.
Taking to Truth Social, Trump said, "For the theft of our Assets, and many other reasons, including Terrorism, Drug Smuggling, and Human Trafficking, the Venezuelan Regime has been designated a FOREIGN TERRORIST ORGANIZATION." He further added, "Therefore, today, I am ordering A TOTAL AND COMPLETE BLOCKADE OF ALL SANCTIONED OIL TANKERS going into, and out of, Venezuela."
