Indian markets are likely to open on a cautious note on Friday, with early indicators pointing to a weak start amid a broader global sell-off driven by escalating tensions in West Asia.
Trends on GIFT Nifty suggest a negative opening for benchmark indices, with Nifty futures trading around the 23,137.50 mark, down 140.50 points or 0.60 per cent in early trading today.
Global Cues: Asia Extends Sell-Off
Asian equities remained under pressure on Friday, tracking losses on Wall Street as investors reacted to rising geopolitical risks and concerns of a prolonged energy shock.
According to a Reuters report, MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 1.4 per cent, while Japan’s Nikkei declined 1.3 per cent. South Korea’s KOSPI fell sharply by 3 per cent, extending its weekly losses to 8.5 per cent.
Chinese blue-chip stocks slipped 1 per cent, while Hong Kong’s Hang Seng index was down 0.4 per cent.
Market sentiment remained fragile as concerns persisted over the possibility of the conflict in West Asia escalating further, particularly with uncertainty around shipping routes such as the Strait of Hormuz.
Oil, Yields and Risk Sentiment in Focus
Oil prices remained volatile amid the ongoing conflict. Brent crude futures eased 1 per cent to $107.07 per barrel after a sharp rise of nearly 6 per cent overnight.
Despite the marginal dip, analysts noted that underlying pressure on oil prices remains, which has raised concerns around inflation and borrowing costs globally.
Global bond yields surged as markets priced in higher inflation risks. This has added to the pressure on equities, with investors shifting towards safer assets such as the US dollar.
What It Means for Indian Markets
The weak global backdrop is expected to weigh on domestic equities at the opening bell.
This comes after a strong rally in the previous trading session on Wednesday, when the BSE Sensex surged 1,205 points or 1.63 per cent to close at 75,273.45.
Over two sessions, markets had gained 2,577.06 points or 3.54 per cent, with investor wealth rising by Rs 15.80 lakh crore, supported by easing crude oil prices and hopes of de-escalation in the West Asia conflict.
However, the latest global developments appear to have reversed sentiment, at least in the near term.
Volatility Likely to Persist
With geopolitical uncertainty continuing and global markets under pressure, volatility is expected to remain elevated in the near term.
Analysts have flagged that rising oil prices, higher bond yields and a strengthening US dollar could continue to weigh on emerging markets, including India.
For investors, Friday’s session is likely to be driven by global cues, particularly developments in West Asia and movements in crude oil and bond yields.
The direction of markets will also depend on whether domestic investors continue to provide support after the recent rally or turn cautious in response to global risks.
