D-St set for a cautious opening as GIFT Nifty signals muted start

Benchmark Nifty declined 1.6% on Thursday, marking its sharpest fall since July 8. Analysts say Indian equities are likely to remain weak in the near term amid renewed uncertainty over a potential resolution of the US-Iran conflict, elevated crude prices and rising global bond yields. Hopes of a near-term resolution remained subdued after US President Donald Trump indicated that a potential deal with Iran could come only after the November US midterm elections, while renewed Houthi activity in the Red Sea and tensions involving Saudi Arabia have heightened global supply risks and inflationary pressures.

STATE OF THE MARKETS

GIFT Nifty (Earlier SGX Nifty) signals a muted start

GIFT Nifty on the NSE IX traded lower by 3.5 points, or 0.02 per cent, at 23,094, signaling that Dalal Street was headed for a muted start on Friday.


Tech View: The RSI has turned bearish once again, creating further negative momentum. The immediate support is placed at 23,000, below which the index might fall towards 22,700. On the higher end, resistance is placed at 23,200.

India VIX: India VIX, which is a measure of the fear in the markets, rose 23% to settle at 12.69 levels.

Asian shares slip

Moves in Asia Pacific tracked a global slump in bonds that pushed the 30-year Treasury yield to the highest since 2004 and lifted the 10-year yield eight basis points to 5.20% in the New York session. The securities broadly held their losses in early trading on Friday.

• S&P 500 futures fell 0.2% as of 9:57 a.m. Tokyo time
• Hang Seng futures fell 0.3%
• Japan’s Topix rose 0.6%
• Australia’s S&P/ASX 200 fell 0.6%
• Euro Stoxx 50 futures rose 0.4%

US stocks flat

The S&P 500 ended marginally down on Thursday, with Microsoft dipping and Meta Platforms rising, as uncertainty about the Middle East lifted oil prices and Treasury yields.

The S&P 500 and Nasdaq rebounded from session lows after Reuters reported US and Iranian negotiators were exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran.

Gold prices decline

Gold prices eased on Friday and were set for a weekly decline, pressured by a stronger dollar and growing expectations that the US Federal Reserve will keep interest rates elevated for longer to combat inflation.

Oil prices fall

Oil prices fell slightly on Friday as markets weighed the possibility of a truce between the US and Iran against the bombing of Saudi Arabia by Houthi rebels after a week of price spikes.

Dollar rallies

The dollar's surge, propelled by strong US economic data, a hawkish Federal Reserve, and surging bond yields, is gathering momentum. An increasingly interventionist US Treasury will not welcome this – and it’s a reminder that for market actions to work, governments need to be willing to go big.

Read more: Ahead of Market: 10 things that will decide stock market action on Friday

Stocks in F&O ban today

1) SAIL

2) Manappuram

3) Kaynes

4) LIC Housing Finance

Securities in the ban period under the F&O segment include companies in which the security has crossed 95% of the market-wide position limit.

Read more: The hype, the listing & the lessons: 5 takeaways for investors from the NSE IPO

Rupee

The rupee weakened by 23 paise to settle at 95.96 (provisional) against the US dollar on Thursday, dragged by a surge in crude oil prices and a strong greenback amid geopolitical uncertainties.

Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclosures here