Indian equity markets are expected to open on a strong note on Friday, with GIFT Nifty futures trading 467 points higher at 22,954, pointing towards a significant gap-up opening for benchmark indices.
However, traders should brace for potential volatility as global sentiment remains fragile amid escalating US-China trade tensions and mixed signals from global markets.
Overnight, US markets experienced sharp declines as escalating trade tensions under the Trump administration overshadowed otherwise positive economic data, highlighting the growing impact of trade policy on investor sentiment.
- The Dow Jones Industrial Average fell 2.50%, signaling widespread concern.
- The S&P 500 declined 3.46%, reflecting the breadth of the market pullback.
- The Nasdaq Composite slid 4.31%, indicating particular weakness in the tech sector.
These losses reflect growing anxieties surrounding the potential for a recession as the tariff standoff intensifies, raising concerns about the long-term economic outlook.
Asian equities mirror US weakness: gold reaches record high on safe-haven demand
Asian equities followed the lead of US markets at the open, reflecting a risk-off tone across the region.
Japan’s Topix fell 4.7%, while Australia’s ASX 200 declined 2.1%, illustrating the widespread impact of global trade tensions.
Hang Seng futures fell 0.5%, further reinforcing the negative sentiment. Meanwhile, gold reached a record high, a classic sign of safe-haven demand as investors seek refuge from market volatility.
Technical signals: a rally without staying power?
Despite the expected gap-up opening, technical indicators suggest a cautious approach.
The Relative Strength Index (RSI) shows a bearish crossover, indicating that the rally may lose momentum if the Nifty fails to decisively break above the 22,500 level.
Support is seen at 22,000, underscoring the importance of this level for maintaining positive momentum.
Volatility on the rise: India VIX jumps
The India VIX, a measure of market volatility, jumped 5% to 21.43, pointing to heightened market nervousness and a potential increase in price swings in the near future.
Foreign institutional investors (FIIs) remained net sellers on Wednesday, offloading shares worth Rs 4,358 crore, while domestic institutional investors (DIIs) provided some counterbalance by purchasing Rs 2,976 crore.
FII net short positions have continued to rise, reaching Rs 1.15 lakh crore, up from Rs 1.09 lakh crore a day earlier, reflecting persistent bearishness among foreign investors.
The rupee extended its losing streak, settling 42 paise lower at 86.68 against the dollar, weighed down by global uncertainty and the Reserve Bank of India’s (RBI) recent rate cut, signaling a complex interplay of domestic and international factors.
F&O ban list: stocks under scrutiny
The following stocks are currently under the Futures & Options (F&O) ban:
- BirlaSoft
- Hindustan Copper
- Manappuram
- Nalco
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