Nifty 50, Sensex to Open Cautiously as FIIs Selling Continue

Pre-Market Update at 7:40 AM: Indian equity benchmarks, the Sensex and Nifty 50, are likely to begin Tuesday, December 16, on a muted note, tracking broadly negative cues from global markets. Asian equities were mostly lower after US stocks closed in the red overnight, as investors remained cautious ahead of key US economic data that could influence the interest rate outlook.

Early indicators pointed to a flat start for domestic markets. The GIFT Nifty was trading near the 26,086 level, at a discount of around 8.2 points, suggesting limited upside momentum at the open.

Asian markets slipped modestly in early trade as risk appetite weakened ahead of important US macroeconomic releases. Japanese indices traded lower, while Australian stocks edged up slightly. The cautious tone followed a second consecutive decline in US equities. Meanwhile, stock-index futures for the S&P 500 and Nasdaq 100 also moved lower during early Asian hours on Tuesday.

India and the United States are close to finalising a framework trade agreement aimed at easing reciprocal and punitive duties on Indian exports, Commerce Secretary Rajesh Agrawal said on Monday. Although no specific timeline was shared, he highlighted that negotiations are progressing at a fast pace and in a constructive manner.

Currently, Indian exports to the US face cumulative additional tariffs of up to 50 per cent. Momentum toward a potential agreement picked up last week after a US delegation, led by Deputy Trade Representative Rick Switzer, visited India for discussions held on December 10 and 11.

Foreign Institutional Investors continued to exert pressure on the markets. On Monday, December 15, FIIs were net sellers, offloading equities worth Rs 1,468.32 crore. In contrast, Domestic Institutional Investors remained supportive, buying equities worth Rs 1,792.25 crore and extending their streak to the 37th consecutive session of net inflows.

Indian equity benchmarks ended marginally lower on Monday, snapping a two-day winning streak. The markets opened with a gap-down start but recovered most of the losses as the session progressed, reflecting cautious sentiment amid sustained FII selling and uncertainty surrounding the India–US trade talks.

At the close, the Nifty 50 slipped 19.65 points, or 0.08 per cent, to 26,027.30, while the Sensex declined 54.30 points, or 0.06 per cent, to 85,213.36. India VIX rose 1.41 per cent, signalling a rise in market volatility.

On the sectoral front, six of the eleven major indices ended higher. Nifty Media was the top performer, rising 1.79 per cent and logging its strongest Intraday gains in over two months. Nifty Auto fell 0.91 per cent, snapping a two-day rally. Broader markets were mixed, with the Nifty Midcap 100 down 0.12 per cent, while the Nifty Smallcap 100 gained 0.21 per cent.

US equities closed lower on Monday as sustained selling in technology stocks dragged major indices into negative territory. Investors remained cautious ahead of a packed schedule of economic data releases.

The S&P 500 erased early gains to end about 0.2 per cent lower, marking its second straight decline. The Nasdaq 100 slid 0.5 per cent, extending losses for a third consecutive session. The Dow Jones Industrial Average slipped 41.49 points, or 0.09 per cent, to close at 48,416.56. The S&P 500 ended down 10.90 points at 6,816.51, while the Nasdaq Composite fell 137.76 points, or 0.59 per cent, to 23,057.41.

Technology stocks led the decline, with Broadcom Inc. recording its steepest three-day fall since 2020. Oracle Corp. also extended its losing streak, with recent losses nearing 17 per cent. US equity futures were largely flat in early Asian trade, indicating a cautious global mood.

The US dollar weakened to near a two-month low during early Asian trading on Tuesday as investors awaited a slew of economic data, including the delayed November US jobs report. The dollar index slipped 0.2 per cent to 98.261, approaching its lowest level since October 17.

Gold prices were steady in early Asian trade ahead of the US November employment report. Spot gold was little changed at USD 4,306.60 per ounce. Silver declined 0.32 per cent to USD 63.90 after a sharp rise in the previous session.

Crude oil prices remained under pressure. Brent crude futures hovered around USD 60.3 per barrel, while WTI crude traded near USD 56.6 per barrel, marking the lowest levels since early 2021. Prices were weighed down by expectations of a global supply glut and optimism surrounding a potential peace deal between Russia and Ukraine.

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