Cautious optimism: shares may see uptick at open

GIFT Nifty:

Trading of Nifty 50 index futures on the GIFT Nifty indicates that the Nifty could rise 21.50 points at the opening bell.

The Reserve Bank of India (RBI) announced a transfer of Rs 2.11 lakh crore to the government for the financial year 2023-24. This represents the highest surplus transfer on record by the central bank. This surplus will be reflected in the government's accounts for the financial year 2024-25, providing a significant boost to their fiscal position.

Global Markets:

Asian markets climbed on Thursday despite central banks' cautious stance on easing interest rates due to persistent inflation. Investor anxiety was heightened with China conducting military drills near Taiwan. Japan's manufacturing sector showed a positive surprise, expanding to 50.5 in May.

Meanwhile, US stocks dipped after the Fed minutes revealed a gradual approach to curbing inflation, though Nvidia's upbeat revenue forecast lifted its share price.

Nvidia reported a blowout quarter, with net income and revenue tripling year-over-year. They also announced a 10-for-1 stock split and a significant dividend increase. However, this positive news was overshadowed by the US Fed meeting minutes. The minutes revealed a hawkish stance from some Fed officials, indicating a willingness to raise interest rates due to concerns about inflation not subsiding as quickly as anticipated. This news sent markets lower.

Domestic Markets:

The benchmark indices clawed their way back today, with the Nifty closing near 22,600 despite early weakness. FMCG stocks were the flavor of the day, buoyed by monsoon optimism. Metal and banking shares, however, remained lackluster. The positive momentum comes despite global jitters ahead of the US Fed minutes release. Investors seem optimistic about reduced election worries, but foreign investors remain cautious on the sidelines awaiting the election outcome. In the barometer index, the S&P BSE Sensex, was up 267.75 points or 0.36% to 74,221.06. The Nifty 50 added 68.75 points or 0.31% to 22,597.80.

Foreign portfolio investors (FPIs) sold shares worth Rs 686.04 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 961.91 crore in the Indian equity market on 22 May 2024, provisional data showed.

FPIs have sold shares worth over Rs 38186 crore in May so far. They offloaded shares worth 35692 crore in April 2024.

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