Before Market Opens: From US Fed minutes to oil price drop; 9 things to know at 9 am on January 5, 2023

The S&P 500 finished higher on Wednesday but below its session peak after volatile trading following the release of minutes from the Federal Reserve's last meeting, which showed officials laser-focused on controlling inflation even as they agreed to slow their pace of interest rate hikes. The Dow Jones Industrial Average rose 133.4 points, or 0.4 percent, to 33,269.77; the S&P 500 gained 28.83 points, or 0.75 percent, to 3,852.97; and the Nasdaq Composite added 71.78 points, or 0.69 percent, to 10,458.76.

Asia-Pacific markets climbed as investors shrug off the US Federal Reserve’s commitment to higher interest rates in tackling inflation.Australia’s S&P/ASX 200 rose 0.42 percent. In Japan, the Nikkei 225 was up 0.35 percent in its first hour of trade, while the Topix inched up fractionally. The Kospi rose 0.71 percent.

At 8:20 am, the SGX Nifty was trading 33 points or 0.2 percent higher at 18,144, indicating a positive opening for the Indian markets. 

The domestic market witnessed a strong selloff on January 4 as investors booked profit amid mixed global cues while concerns over global economic growth and the Covid situation in China weighed on sentiment. Sensex closed 637 points, or 1.04 percent, lower at 60,657.45. Nifty closed the day with a loss of 190 points, or 1.04 percent, at 18,042.95 ahead of the minutes of the Fed's December meeting which is expected to offer some insights to investors on the path of policy tightening.

Oil fell by more than $4 a barrel on Wednesday, posting the steepest percentage loss in the first two trading days of any year for over three decades, as investors worried about fuel demand as the global economy slows and Covid-19 cases grow in China. Brent futures settled at $77.84 a barrel, falling $4.26, or 5.2 percent. US crude settled at $72.84 a barrel, shedding $4.09, or 5.3 percent.

All officials at the Federal Reserve's December 13-14 policy meeting agreed the US central bank should slow the pace of its aggressive interest rate increases, allowing them to continue increasing the cost of credit to control inflation but in a gradual way meant to limit the risks to economic growth. The minutes of the meeting, which were released on Wednesday, showed that policymakers were still focused on controlling the pace of price increases that threatened to run hotter than anticipated, and worried about any misperception in financial markets that their commitment to fighting inflation was flagging.

Foreign institutional investors (FII) sold shares worth ₹2,620.89 crore, while domestic institutional investors (DII) bought shares worth ₹773.58 crore on January 4, as per provisional data available on the NSE.

Gold prices held steady on Thursday, hovering close to a near seven-month high scaled in the previous session, while market participants prepared for US jobs data that could influence the Federal Reserve's policy trajectory, reported Reuters.

The rupee rose 8 paise to end at 82.81 per dollar in the previous session on sharp decline in crude oil prices and a weak US dollar. Experts except the domestic currency to trade volatile as sustained foreign outflows may continue to put pressure on it but weak crude oil prices are expected to offer support.