Indian equity markets are likely to open on a cautious note on Thursday, with GIFT Nifty indicating a muted start despite Wednesday’s sharp rally. At 7:40 am IST, GIFT Nifty was trading at 24,230.5, down 72.5 points or 0.30%, suggesting a flat-to-negative opening for benchmark indices.
The cautious mood follows a mixed global backdrop after the US Federal Reserve kept interest rates unchanged at 3.50%-3.75%, while signalling that future policy decisions will remain data-dependent. The divided stance among policymakers has left investors uncertain about the trajectory of interest rates.
Overnight, Wall Street ended lower ahead of earnings from major US technology companies as concerns over lofty AI valuations and elevated capital expenditure weighed
on sentiment. However, Asian markets traded mixed on Thursday morning, with Japan’s Nikkei outperforming while broader regional markets struggled for direction.
Asian chipmakers have been the centre of attention this week after a deep selloff in South Korean stocks that wiped more than $2 trillion from the country’s equity market rocked markets and investors freted about the returns from massive AI spending. The KOSPI rose 4% in choppy trading on Thursday, but is staring at a 12% weekly decline that prompted Finance Minister Koo Yun-cheol to apologise for the introduction of single-stock leveraged ETFs.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose over 1% in early trading. Japan’s Nikkei was 2% higher, but set for a 3% drop in the week. Earnings from US megacaps Meta and Microsoft outlined the contrasting fortunes of the companies that are able to showcase their ability to generate cash even as they spend to build out AI infrastructure.
Geopolitical tensions also remained in focus after US President Donald Trump warned that Iran was “going to get a beating”, reviving concerns over a potential escalation in the Middle East. The uncertainty has kept crude oil prices elevated, posing inflation risks for import-dependent economies such as India.
Brent futures slipped below $90 per barrel, after jumping over 7% a day earlier as fighting in the Middle East escalated, although data showed tankers continued to make their way out of the region despite the continued missile and drone strikes.
Back home, institutional flows remained supportive. Foreign institutional investors (FIIs) were net buyers of Rs 2,982 crore in the previous session, while domestic institutional investors (DIIs) purchased equities worth Rs 998 crore, reflecting continued confidence in Indian markets.
On Wednesday, domestic equities staged a strong rebound. The BSE Sensex surged 888.68 points (1.16%) to close at 77,654.60, while the Nifty 50 climbed 264.85 points (1.10%) to settle at 24,250.20, led by gains in HDFC Bank, Larsen & Toubro and Infosys.
Technical outlook
According to Ponmudi R, CEO of Enrich Money, the Nifty continues to maintain a constructive undertone after reclaiming the 24,200 level.
“The 24,300-24,400 zone remains the immediate resistance as it coincides with the 200-day EMA. A decisive move above this range could pave the way for 24,500-24,600. On the downside, 24,150-24,000 is expected to act as the first support zone, while a break below 24,000 could trigger profit booking toward 23,900-23,800,” he said.
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