Indian benchmark indices Sensex and Nifty may open modestly higher on Wednesday, with GIFT Nifty pointing to a positive start even as investors remain cautious ahead of crucial US inflation data. Mixed Asian markets, overnight losses on Wall Street and a further rise in crude oil prices could keep gains in check.
GIFT Nifty was trading at 24,555.5 around 7:50 am, up 40 points, or 0.16 percent, indicating that the Nifty 50 could open above Tuesday's close of 24,471.70. The domestic market will attempt to recover after ending lower in the previous session. On Tuesday, the Sensex fell 388.19 points, or 0.49 percent, to 78,154.25, while the Nifty declined 112.10 points, or 0.46 percent, to 24,471.70, amid elevated crude oil prices and geopolitical uncertainty.
Global investors are awaiting the US consumer price inflation report for July, due later on Wednesday, which could provide fresh clues on the Federal Reserve's next interest-rate move. The uncertainty kept US equity-index futures largely unchanged in Asian trade on Wednesday.
Share Markets Live Updates | Sensex, Nifty, GIFT Nifty Today
Asian markets traded cautiously amid ongoing geopolitical tensions and uncertainty ahead of the US inflation data, although gains in technology shares provided some support. MSCI's Asia-Pacific equities gauge advanced 0.4 percent, while South Korea's technology-heavy Kospi jumped 2.8 percent, helped by robust corporate earnings.
Elsewhere, Japan's Topix gained 0.4 percent, while Nikkei 225 futures slipped 0.3 percent. Australia's S&P/ASX 200 declined 0.5 percent, Hong Kong's Hang Seng fell 0.8 percent, and the Shanghai Composite was little changed.
US stocks ended lower on Tuesday as investors grew more pessimistic about the prospects for a deal that could ease tensions in the Middle East and reopen the Strait of Hormuz. Iran's newly appointed Supreme National Security Council secretary said the Strait would remain closed unless the US changed its behaviour and accepted Tehran's conditions for ending the war, further clouding the prospects for an agreement.
The S&P 500 fell 0.32 percent, the Nasdaq Composite dropped 0.6 percent, and the Dow Jones Industrial Average declined 0.34 percent.
Crude oil remains a key risk for Indian equities, with prices extending their recent rally on Wednesday amid fading hopes for a US-Iran peace agreement and concerns about supply disruptions following attacks on two ships. Brent crude futures rose 0.81 percent to $89.63 a barrel, while US West Texas Intermediate crude gained 0.85 percent to $83.91.
Both benchmarks had settled more than $1 higher on Tuesday at their highest closing levels since July 31, extending gains after jumping about 5 percent on Monday.
Institutional flows remained supportive despite Tuesday's decline in domestic equities. Foreign institutional investors (FIIs) remained net buyers for a third consecutive session on August 11, purchasing Indian equities worth Rs 258 crore. Domestic institutional investors (DIIs) were also marginal net buyers, investing around Rs 25 crore.
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