Nifty, Sensex Set for Weak Start Following Weakness in Asian Markets

Pre-Market Update at 7:40 AM: Indian equity benchmarks, the Sensex and Nifty 50, are likely to begin Monday, December 15, on a weak note, tracking negative cues from global markets. Asian peers were largely trading in the red after U.S. equities closed lower on Friday. The GIFT Nifty was hovering near the 26,052 level, indicating a negative start of around 86 points for domestic indices.

Market sentiment this week will be guided by WPI inflation data, global market trends and the trading activity of foreign and domestic institutional investors. In early Asian trade, most regional markets remained under pressure, keeping investors cautious.

On Friday, December 12, Foreign Institutional Investors were net sellers, offloading equities worth Rs 1,114.22 crore. Domestic Institutional Investors continued to support the market, buying equities worth Rs 3,868.94 crore. This marked the 36th consecutive session of net inflows by DIIs.

Indian equity benchmarks closed higher on Friday, extending gains from the previous session. The Nifty 50 advanced 148.40 points, or 0.57 per cent, to settle at 26,046.95, while the Sensex rose 449.52 points, or 0.53 per cent, to end at 85,267.66. India VIX declined 2.81 per cent, indicating lower volatility. On a weekly basis, however, the Nifty 50 slipped 0.53 per cent, extending losses for the second straight week. Investors now await India’s November inflation data, due after market hours.

Sectorally, the Nifty Metal index surged 2.66 per cent to a three-week high, supported by an improved demand outlook after China’s growth push and a weaker U.S. dollar following a rate cut. Broader markets outperformed, with the Nifty Midcap 100 rising 1.18 per cent and the Nifty Smallcap 100 gaining 0.94 per cent. FMCG was the only sector to close in the red, down 0.21 per cent.

U.S. equity markets ended Friday on a weaker note as investors shifted capital from technology stocks to value-oriented sectors. The S&P 500 declined 1.07 per cent to 6,827.41, while the Nasdaq Composite fell 1.69 per cent to 23,195.17. The Dow Jones Industrial Average slipped 245.96 points, or 0.51 per cent, to close at 48,458.05, despite touching a fresh Intraday high. The Russell 2000 dropped 1.51 per cent to 2,551.46, though it also hit a new all-time high during the session.

The U.S. dollar began the week on a softer note, while the euro and British pound remained stable ahead of key central Bank policy decisions. Currency movements were largely range-bound in early Asian trade as investors stayed cautious ahead of major economic releases, including U.S. inflation data and the nonfarm payrolls report.

Rising confidence among Japan’s major manufacturers has strengthened expectations that the Bank of Japan could raise interest rates in the coming week, adding to global market uncertainty.

Gold prices stabilised after four consecutive sessions of gains as mixed signals from Federal Reserve officials led traders to pare expectations of aggressive rate cuts next year. Gold hovered around USD 4,305 per ounce, trading near USD 4,306.33 in early Monday trade. Silver edged up 0.1 per cent to USD 62.01 after a sharp decline in the previous session.

Crude oil prices rebounded from their weakest closing levels in nearly two months, supported by improved sentiment across global markets. West Texas Intermediate rose toward USD 58 per barrel, while Brent crude moved back above USD 61. Despite the rebound, oil prices remain under pressure, having declined close to 20 per cent so far this year amid oversupply concerns. The International Energy Agency reiterated that the market is heading toward a record surplus, with global oil inventories climbing to a four-year high.

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Disclaimer: The article is for informational purposes only and not investment advice.