Summary of this article
D-Street is expected to face volatility due to Trump’s new tariff threat on agricultural products, leading to a negative bias in early trade.
Strong expectations (87.4 per cent) for a US Federal Reserve rate cut on December 10 provide a positive global cushion, countering domestic pessimism.
Mixed Asian markets, subtle crude oil price rise, and stable Dollar Index (99.05) will also influence sectoral performance today.
Stock Market Cues: Sensex and Nifty are expected to open lower on December 9, tracking a muted start to the Gift Nifty which opened around 25,930 with a dip of 18 points. In yesterday’s trade, the Nifty 50 finished around 25,960.55 with a decline of 0.86 per cent while the Sensex finished around 85,102.69 down by 0.71 per cent.
Stock Market Cues For Today
On December 9, several policy decisions and macroeconomic factors are expected to frame investor sentiment. Some of the key factors which are expected to influence trade include anticipation regarding the announcement of a rate cut by the US Federal Reserve, US President Donald Trump’ latest threat related to tariffs, changes in the Dollar Index and fluctuations in gold and crude oil prices.
Trump’s Tariff Threat
US President Donald Trump has stated that he is likely to announce new tariffs on imports of agricultural products such as rice from India. According to a Bloomberg report Trump made the statement at a meeting held at the White House as he announced a multi-billion-dollar farm relief package for American farmers. Trump added that the package will be funded by tariff revenues. The US President also accused India and other rice producing countries of dumping. D-street is expected to react to the threat in today’s trade.
“All right, and we'll take care of it. That's great. It's so easy… Tariffs, again, solves the problem in two minutes,” Trump said at the White House.
US Federal Reserve Rate Cut Expectations
The US Federal Reserve is set to announce its policy decision on December 10. As per the CME Group’s FedWatch Tool the odds indicate an 87.4 per cent chance of a 25 basis-point cut compared to earlier when the chances were below 30 per cent. Expectations around a potential rate cut tend to drive global risk sentiment which in turn impacts emerging markets like India.
US Dollar Movement
The U.S. dollar gained against major currencies on December 8 ahead of the Federal Reserve’s announcement of a policy decision. Investors braced for signals of a milder easing cycle than expected. The US Dollar Index closed the session lower at 99.05 down by 0.04 per cent. Notably changes in dollar's value influence capital flows, a rising dollar and higher yields often lead to Foreign Institutional Investor (FII) outflows.
Crude Oil Prices Today
On December 9, crude oil prices traded lower, the price of West Texas Intermediate crude remained around $58.71 down by $0.15 or 0.25 per cent. The price of Brent Crude remained around $62.38 down by $0.11 or 0.18 per cent.
Gold Rate On December 9
Physical gold prices extended gains on December 9, the price of 24 karat gold remained around Rs 13,043 per gram, the price of 22 karat gold was around Rs 11,956 per gram and the price of 18 karat remained around Rs 9,783 per gram.
Asian Indices Trade Mixed
On December 9, most Asian indices traded under pressure as the KOSPI, Hang Seng and the Shanghai Composite declined 0.7 per cent, 0.82 per cent and 0.13 per cent respectively in the early hours of trade. However, Japan’s Nikkei 225 continued to trade higher by 0.35 per cent.
US Markets
US market indices closed in the red on December 8 with the Nasdaq Composite, S&P 500 and Dow Jones Industrial Average finishing the session lower by 0.14 per cent, 0.35 per cent and 0.45 per cent respectively.
