Sensex and Nifty opened in green on Thursday, tracking Asian peers, after a faster-than-expected rise in US consumer price inflation raised expectations of another Federal Reserve rate hike this year.
Higher US interest rates make emerging markets such as India less attractive to foreign investors, who have already sold Indian stocks for 14 consecutive sessions through Wednesday, taking year-to-date outflows to a record $32.7 billion.
GIFT Nifty futures stood at 22,606.5 at 7:52 a.m. IST, signalling a weak start for the benchmark Nifty 50, which closed at 22,622.7 on Wednesday.
The benchmark stock indices closed lower on Wednesday amid profit-taking after a sharp rally in the previous session, as a spike in wholesale price-based inflation and firm crude oil prices hit investor sentiment.
The 30-share BSE Sensex declined 251.89 points, or 0.34 per cent, to settle at 72,781.89. During the day, it hit a high of 73,195.26 and a low of 72,578.75. The 50-share NSE Nifty dropped 99.25 points, or 0.44 per cent, to end at 22,622.70.
Hotter-than-expected US inflation concerns over tighter global monetary conditions, a sentiment negative for risk assets such as emerging market equities, two traders said.
Brent crude traded around $104.5 a barrel as investors weighed supply risks from attacks on shipping through the Strait of Hormuz against US efforts to lower petroleum shipping costs by easing sanctions on vessels. [O/R]
Domestically, investor attention is likely to remain focused on corporate earnings, with Wipro scheduled to announce its second-quarter results later in the day.
Following HCL Tech’s better-than-expected earnings earlier this week, which sparked a rally in technology stocks, markets will closely scrutinise Wipro’s outlook for discretionary technology spending, deal conversions and margins.
Robust primary-market activity could continue to divert liquidity from the secondary market, potentially limiting near-term upside for stocks, two traders said.
Jio Platforms on Wednesday announced plans to raise up to $3.2 billion in what would be India’s largest initial public offering to date.
The IPO would value the Mukesh Ambani-founded group at about $108.3 billion, with a price band of 1,065 rupees to 1,119 Indian rupees ($11.19 to $11.76) per share.