EconomyMarkets
Nasdaq bounces back as AI stocks recover, oil holds near $110 while Indian markets take Dussehra break
Amazon and chipmakers led a rebound on Wall Street on Monday night, but Brent stayed close to a five-month high and Europe slid, leaving a mixed picture for Indian shares when they reopen on Wednesday.
Key points
- The Nasdaq rose 1.1% to 26,430.89 on Monday, winning back part of last week's steep losses.
- Brent crude settled at $109.55 a barrel, just off a five-month high, as attacks in the Gulf continued.
- Indian stock exchanges are shut on Tuesday for Dussehra and reopen on Wednesday.
Wall Street’s technology shares clawed back some of last week’s heavy losses on Monday, but oil stayed close to $110 a barrel and European markets fell, giving Indian investors a mixed set of signals to digest during a one-day pause. Indian stock exchanges are shut on Tuesday for Dussehra and open again on Wednesday.
The Nasdaq Composite rose 290.85 points, or 1.1%, to 26,430.89. The S&P 500 gained 31.29 points, or 0.4%, to 7,690.73, while the Dow Jones Industrial Average slipped 36.38 points to 51,966.03. Smaller companies in the Russell 2000 added 0.3%.
The buying was narrow. Investors returned to the artificial intelligence names that had been sold hard last week over doubts about how much AI spending is being funded with debt. Amazon rose 4.95%, Palantir 4.36%, Tesla 3.74% and the memory chipmaker Micron 2.95%. An announcement from Nvidia on memory and technology standards helped ease worries about demand for AI infrastructure. Most US shares outside technology fell.
“Markets are starting the week on a tentative recovery footing,” said Daniela Hathorn, an analyst at Capital.com.
Elsewhere the mood was weaker. European indexes fell more than 1% after weekend protests, with Germany’s DAX among the worst hit. In the US, a builders’ confidence index dropped to 29 in October, its lowest since June 2012.
Oil refuses to back down
Brent crude settled at $109.55 a barrel, down just 31 cents after falling more than $3 during the day. US crude for November delivery rose 2.2% to $103.66, its highest settlement since mid-September, in thin trade before the contract expires.
Two forces pulled in opposite directions. President Donald Trump’s order waiving some sanctions on Russian energy promised more supply, while Yemen’s Houthis claimed fresh strikes on Saudi oil sites and a tanker was reported to have hit a mine in the Strait of Hormuz. Gold edged lower to about $4,170 an ounce.
How Asia started the week
On Monday, Japan’s Nikkei 225 fell 0.8% to 64,799.03 and Taiwan’s market lost 1%, while South Korea’s Kospi rose 1.1% to 5,729.58 and the Shanghai Composite edged up after China reported 4.5% growth for July-September. Indonesia’s market slumped another 5% after MSCI warned it could lose its emerging market status. Tokyo and Seoul open on Tuesday after Wall Street’s tech rebound, which could steady chip shares there.
What it means for India
Indian shares go into the holiday on a weak note. The Sensex fell 876.37 points, or 1.17%, to 73,852.90 on Monday, and the Nifty ended near 22,889, as private banks and IT stocks dragged. A rebound in US tech could help Indian IT shares on Wednesday, but oil remains the bigger worry for a country that imports most of its crude.
The rupee ended at 94.92 to the dollar on Monday, 3 paise weaker, snapping a six-day winning run as importers bought dollars. “RBI measures may help stabilise short-term currency movements, but a sustainable recovery will depend on lower oil prices,” said Gaurav Garg, head of research at Lemonn. Anuj Choudhary, research analyst at Mirae Asset Sharekhan, said: “We expect the rupee to trade with a positive bias on overall weakness in the dollar.”
Traders will also be reading Wednesday’s minutes of the RBI’s October policy meeting. Economists at ANZ said in a note: “We expect a 25bp hike in December.”
Netflix reports its results after the US close on Tuesday, early Wednesday in India, followed by Tesla and Meta on Wednesday.