Indian Markets Set For Weak Start As GIFT Nifty Falls 73 Points; Crude Oil, US Yields In Focus

GIFT Nifty Today: Indian stock markets are likely to open on a cautious note on Thursday, October 1. The GIFT Nifty was trading at 22,586.5, down 73 points or 0.32%, as of 7:34 am, signalling a potentially weak start for the domestic benchmark indices.

Investors are likely to track global cues, crude oil prices, US bond yields and developments around tensions in the Middle East. The external environment remains mixed, with softer US inflation data providing some relief even as elevated Treasury yields and uncertainty over oil supplies continue to weigh on sentiment.

According to Ponmudi R, CEO of Enrich Money, Indian equities are likely to remain choppy as investors balance softer US inflation data against elevated Treasury yields, volatile crude

oil prices and continued uncertainty surrounding the Middle East.

“Indian equities are likely to remain choppy as investors weigh softer U.S. inflation data against elevated Treasury yields, volatile crude oil prices and continued uncertainty surrounding the Middle East. The external backdrop remains mixed, leaving domestic markets sensitive to developments in both global rates and energy markets,” Ponmudi said.

In the previous session on Wednesday, benchmark stock indices Sensex and Nifty closed lower for the third consecutive session, dragged down by last-hour selling in metal and pharma shares amid firm crude oil prices and elevated global bond yields. Giving up all intraday gains, the 30-share BSE Sensex declined 48.78 points, or 0.07 per cent, to settle at 72,480.29 on fag-end selling. After a flat start, the index had gained 533.16 points, or 0.73 per cent, to hit a high of 73,062.23. The 50-share NSE Nifty dropped 95.75 points, or 0.42 per cent, to end at 22,620.45.

In September, the BSE benchmark tanked 4,476.98 points, or 5.81 per cent, and the Nifty dropped 1,459.95 points, or 6 per cent.

Crude Oil, Strait Of Hormuz In Focus

Crude oil prices have moderated from their recent highs, with WTI trading around $90 a barrel and Brent near $98. The decline provides some relief to oil-importing economies such as India, but prices remain elevated and sensitive to developments around the Strait of Hormuz.

Ponmudi said diplomatic efforts between the US and Iran have gained some traction, with Tehran receiving Washington’s response to a proposed seven-day trust-building plan aimed at easing tensions and facilitating the reopening of the Strait of Hormuz.

However, differences over the sequencing of proposed measures remain unresolved, keeping uncertainty around a broader de-escalation.

“Any setback in diplomatic efforts or renewed disruption to energy flows could quickly restore the geopolitical risk premium in crude prices,” Ponmudi said.

US Inflation Data Offers Some Relief

The US inflation backdrop has provided some support to global markets. August headline PCE inflation rose 3.4% year-on-year, below the 3.7% market expectation, while core PCE inflation stood at 3%.

The softer-than-expected reading has reduced some immediate concerns over further tightening by the US Federal Reserve. However, US Treasury yields remain elevated, keeping global financial conditions relatively tight.

The 10-year US Treasury yield has climbed sharply in recent weeks, which could continue to weigh on risk appetite in emerging markets, including India.

Asian Markets Give Mixed Signals

Asian markets are also providing mixed signals, reinforcing the cautious external backdrop. Japan’s Nikkei is gaining around 1%, helped by strength in semiconductor stocks, while South Korean equities remain under pressure as elevated bond yields and broader risk concerns weigh on sentiment.