India’s Sensex is trading at 81,436.76 (-0.11%), and Nifty 50 stands at 24,605.70 (-0.15%)
The Indian stock market witnessed a cautious opening on Thursday as benchmark indices BSE Sensex and Nifty 50 traded lower in early hours. Global cues, domestic inflation expectations, and mixed sectoral performance shaped the trading dynamics.
Indian Benchmark Indices Trading Lower
At 11 AM, the BSE Sensex stood at 81,436.76, down by 89.38 points or 0.11%, while the Nifty 50 was trading at 24,605.70, a decrease of 36.10 points or 0.15%. Investors in India are likely to take cues from positive global developments, including overnight gains on Wall Street. The U.S. Nasdaq reached the 20,000 mark for the first time, and the S&P 500 closed higher, signaling optimism fueled by in-line inflation data.
Global and Domestic Factors Shaping Sentiment
Positive global developments, particularly the expectation of a Federal Reserve interest rate cut next week, have lifted sentiment in equity markets worldwide. Additionally, India’s November retail inflation data, expected later in the day, is projected to decline to 5.53%, offering further hope of supportive monetary policies. Industrial production data for October is also anticipated, which may impact market sentiment further.
On the downside, the Asian Development Bank (ADB) revised India’s growth forecast for FY25, reducing it to 6.5% from the earlier projection of 7%, citing global headwinds and domestic challenges.
Broader Market Performance
In Wednesday’s session, Indian indices ended on a positive note. The BSE Sensex closed at 81,526.14, gaining 16.09 points or 0.02%, while the Nifty 50 finished at 24,641.80, up by 31.75 points or 0.13%. The broader indices fared better, with the Nifty Midcap 100 and Nifty Smallcap 100 rising by 0.27% and 0.38%, respectively.
Sectoral indices presented a mixed picture. Nifty Auto, FMCG, IT, and Consumer Durables were the top gainers, while Banking and Media indices lagged.
Rising Foreign Portfolio Investor Participation
Foreign portfolio investors (FPIs) have been increasingly active in Indian equity and derivatives markets. Industry experts note that new retail investors from tier-3 and tier-4 cities are also making a significant impact on domestic markets. This trend underscores the growing democratization of investing in India. However, systematic investment plan (SIP) account additions declined for the fourth consecutive month in November, dropping to 1.3 million net additions from a record high of 3.5 million in July 2024.
Wall Street Gains Offer Support
U.S. markets provided positive cues as the Nasdaq Composite surged by 1.77% to close at 20,034.89, crossing the 20,000 milestone for the first time. The S&P 500 rose by 0.82% to 6,084.19, while the Dow Jones Industrial Average slipped marginally by 0.22% to 44,148.56. Gains were driven by the latest Consumer Price Index (CPI) data, which matched expectations and strengthened bets on a 25-basis point rate cut by the Federal Reserve next week.
Asian Markets Show Mixed Performance
Asian markets exhibited mixed trends on Wednesday. Japan’s Nikkei 225 climbed 1.55%, while the Topix index gained 1.17%. In contrast, Australia’s S&P/ASX 200 edged lower by 0.09%. South Korea’s Kospi advanced by 0.64%, and the small-cap Kosdaq rose by 0.90%. Meanwhile, China’s CSI 300 recorded a marginal gain of 0.14%, but the Shanghai Composite slipped by 0.07%. The Hang Seng Index in Hong Kong added 0.12%.
Global Market Trends
Global shares rose as an in-line inflation reading from the U.S. reinforced expectations of monetary easing. The MSCI World Index gained 0.58% to 871.45. European stocks also rebounded, with the STOXX 600 index rising 0.28%. Oil prices surged amid new sanctions on Russian oil, with Brent crude settling at $73.52 per barrel, up 1.84%, and WTI crude climbing 2.48% to $70.29 per barrel.
Gold prices advanced, with spot gold rising 0.87% to $2,717.14 per ounce, supported by a weaker dollar. U.S. Treasury yields also moved higher, with the 10-year note yield rising to 4.273%. The dollar index strengthened, gaining 0.31% to reach 106.68.
Investor Takeaways
The mixed trends in Indian markets reflect a confluence of global and domestic factors. Positive global cues from Wall Street and expectations of favorable inflation data in India offer reasons for optimism. However, downward revisions in growth forecasts and subdued SIP contributions highlight areas of concern. Sectoral rotation continues to shape market dynamics, with auto, FMCG, and IT leading gains while banking and media lag behind.
As markets digest inflation data and anticipate further policy announcements, the focus remains on macroeconomic indicators and their impact on investor sentiment. The outcome of the Federal Reserve’s rate decision next week will likely set the tone for the markets in the near term.
Looking Ahead
Indian equity markets are navigating a complex landscape, balancing positive global cues with domestic uncertainties. With key economic data due later today, including retail inflation and industrial production figures, market participants will closely monitor these developments. Global factors, such as crude oil prices and monetary policy actions by central banks, will continue to influence trading trends.
As India positions itself as a key destination for global investment, supported by a stable government and a robust legal framework, the long-term outlook remains positive. For now, short-term volatility is expected as investors react to evolving macroeconomic and geopolitical developments.
