The Indian stock market indices are expected to see a weak opening on Wednesday, following selloff in global markets. The trends on Gift Nifty also signal a gap-down start for the frontline indices, Nifty 50 and Sensex today.
Gift Nifty was trading around 24,238 level, a discount of nearly 202 points from the Nifty futures’ previous close.
Investors are likely to remain cautious over the escalating tensions between the US and Iran in the Middle East and the rising crude oil prices. The US military launched a series of powerful strikes against Iran and revoked a license allowing the country to sell oil, following Iran’s attack on three tankers in the Strait of Hormuz.
The escalating US-Iran war lifted crude oil prices, with Brent oil trading near $76 a barrel.
“The renewed escalation has revived concerns over regional stability and global energy supplies, which could dampen investor sentiment, trigger a risk-off move, and lead to profit booking after the recent rally,” said Ponmudi R, CEO of Enrich Money.
Meanwhile, sustained foreign inflows will remain a key factor in determining the market’s ability to absorb global headwinds and maintain its recovery momentum at higher levels, he added.
Global market cues remain weak. Here’s a look at how global markets have performed:
Asian Markets
Asian markets traded lower, weighed down by selloff in semiconductor stocks and concerns over escalating tensions in the Middle East. Japan’s Nikkei 225 declined 0.73%, while the Topix fell 0.54%. South Korea’s Kospi shed 2.14%, and the Kosdaq plunged 3.97%. Hong Kong’s Hang Seng Index rose 1.5%, while mainland China’s CSI 300 declined 0.47%.
“Investor sentiment remained cautious amid persistent concerns over elevated crude oil prices and renewed geopolitical tensions in the Strait of Hormuz,” said Ponmudi R.
Wall Street
US stock market ended lower on Tuesday, driven by a broad sell-off in semiconductor stocks, with companies such as Intel and Astera Labs posting double-digit losses.
The Dow Jones Industrial Average declined 0.25% to 52,925.15, while the S&P 500 fell 0.45% to end the session at 7,503.85. The Nasdaq closed 1.16% lower at 25,818.69 points.
“The downturn followed mixed quarterly results from Samsung Electronics. Although the company reported record profits, investor concerns over future demand and intensifying competition from a Chinese AI chip developer overshadowed the strong earnings,” said the Enrich Money CEO.
Market sentiment was further dampened by a sharp rise in crude oil prices after the US government tightened sanctions on Iranian oil exports, alongside reports of attacks on commercial tankers in the Strait of Hormuz.
European Markets
European shares slipped on Tuesday, weighed down by a global selloff in tech stocks. The pan-European STOXX 600 declined 0.65%, while Germany’s DAX fell 1.37% and France’s CAC 40 slipped 0.51%.
“Concerns over elevated AI valuations triggered broad-based selling across the sector, with technology stocks in the STOXX 600 index declining 3.6%. The FTSE 100, however, outperformed its regional peers, rising 0.13%. The index’s heavy weighting in oil, gas, and mining stocks helped offset broader market weakness,” noted Ponmudi R.
Nifty 50 Outlook
Nifty 50 continues to maintain a constructive technical structure despite witnessing profit booking at higher levels.
“The 24,300 – 24,350 zone is expected to act as an immediate support level, and a sustained break below this range could expose the Nifty 50 index to further downside towards 24,100 – 24,200. Stabilization in global semiconductor stocks and crude oil prices will be crucial in containing losses and improving overall market sentiment,” said Ponmudi R.
According to him, the 24,500 region continues to act as the immediate resistance zone, and a sustained breakout above this level would reinforce bullish momentum and could pave the way for an advance towards the 24,800 region.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
