Indian stocks set for pullback after sharp rally on oil slide, foreign inflows

Indian shares are expected to break their winning run on Friday as a rout in global markets triggered a cautious undertone for investors as they assessed the impact of the US Democratic win on AI regulations and foreign policy.

Both the Nifty 50 and the BSE Sensex have gained for six sessions in a row, culminating in their best session in seven months on Thursday, aided by lower oil prices and strong foreign fund inflows.

Foreign institutional investors bought stocks worth about 150 billion rupees ($1.6 billion), their biggest single-day net purchase in nearly six years, as investors rotated out of AI-linked trades globally.


GIFT Nifty futures were at 24,460 as of 7:49 a.m. IST, indicating a weaker start for the benchmark Nifty 50, which closed at 24,536.6 on Thursday.

"The indicated decline is relatively contained compared with the severe global selloff, suggesting that lower crude and India's limited direct exposure to the AI-hardware trade are providing some insulation," said Hariselvan Radhakrishnan, founder and CEO of HST Wealth.

Domestic markets are likely to face a volatile session with the possibility of consolidation and profit-booking following the benchmarks' winning streak, according to two analysts.

The Nifty 50 and the BSE Sensex rose 2.4% and 2.6%, respectively, on Thursday after Brent crude fell below $100 a barrel, with investors betting the Democrats' sweep of the US midterm elections could hasten an end to the US-Iran conflict.

Sentiment turned risk-averse overnight after a steep selloffin US technology stocks. The Nasdaq sank 5.5%, while the Dow Jones and S&P 500 slid 3.4% and 4.4%, respectively, after weak Qualcomm results and concerns over slowing spending on AI infrastructure.

Asian markets followed Wall Street lower on Friday, with South Korea's Kospi down 8% and Japan's Nikkei falling 5%.

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