Indian equity markets are bracing for a challenging trading session on Friday, with benchmark indices Sensex and Nifty 50 expected to open lower amid a widespread global sell-off that has particularly hammered technology and artificial intelligence stocks.
Global Market Pressures Mount
The negative sentiment stems from overnight losses on Wall Street, where all three major US stock indexes recorded their steepest daily percentage declines in over a month. Asian markets followed suit, trading lower on Friday as investors reacted to the technology sector downturn and reassessed expectations for interest rate cuts amid persistent inflation concerns.
Japan's Nikkei 225 declined 1.31%, while South Korea's Kospi slipped 2.51%, reflecting the broad-based nature of the sell-off. Gift Nifty was trading around 25,848 level, representing a discount of nearly 106 points from the Nifty futures' previous close, clearly signaling a negative opening for Indian market indices.
Domestic Market Context and Expert Outlook
On Thursday, the Indian stock market ended virtually flat, with the Sensex gaining a marginal 12.16 points (0.01%) to close at 84,478.67, while the Nifty 50 settled 3.35 points (0.01%) higher at 25,879.15. The modest gains reflected profit booking at higher levels after recent rallies.
According to Ajit Mishra, SVP of Research at Religare Broking Ltd, some consolidation is expected following the recent market rally, though the overall market undertone remains constructive. He emphasized the resilience in key sectors such as banking and IT, advising traders to adopt a stock-specific approach focusing on sectoral outperformers like banking, auto, and metals while maintaining disciplined risk management strategies.
Key Factors Influencing Market Sentiment
Several critical developments are shaping market dynamics today. The declaration of Bihar Assembly election results adds a layer of domestic political uncertainty, with counting for all 243 seats scheduled throughout the day. The elections, conducted in two phases on November 6 and 11, recorded one of the highest-ever turnouts, with most exit polls predicting a victory for the ruling NDA.
On the global front, US stock markets ended sharply lower on Thursday. The Dow Jones Industrial Average declined 1.65% to 47,457.22, while the S&P 500 dropped 1.66% to 6,737.49. The tech-heavy Nasdaq suffered the most significant blow, closing 2.29% lower at 22,870.36.
Major technology stocks witnessed substantial declines, with Nvidia falling 3.6%, Tesla plunging 6.6%, Broadcom tanking 4.3%, AMD declining 4.22%, Microsoft falling 1.54%, and Oracle cracking 4.14%. Media and entertainment giant Walt Disney saw its shares tumble 7.8%.
Economic data showed slight improvement in US jobless claims, with initial claims for state unemployment benefits dipping to a seasonally adjusted 227,543 for the week ended November 8 from 228,899 in the prior week. However, Federal Reserve Bank of San Francisco President Mary Daly cautioned that it's premature to decide whether policymakers should lower interest rates when they gather in December, describing the direction of change in policy as appearing neutral.
In commodity markets, gold prices traded higher amid a weak dollar, with spot gold rising 0.3% to $4,183 per ounce after snapping a four-day winning streak overnight. The US dollar remained on track for a weekly fall, languishing near a two-week low at 99.27 against a basket of currencies.
