- Indian equities may open higher despite weak global cues as GIFT Nifty rose 0.23% to 24,109
- US markets declined with Dow down 0.43% and Nasdaq dropping 0.71%, pressuring global equities
- Indian IT ADRs fell, with Infosys down 0.42% and Wipro down 0.81%, weighing on tech stocks
Indian equities could open on a positive note on Wednesday despite weak global cues, with GIFT Nifty signalling gains. However, weakness in Indian IT ADRs, elevated oil prices and rising bond yields could keep investors cautious.
GIFT Nifty rose 0.23% to 24,109 on Tuesday, indicating that Dalal Street could buck the broader global risk-off trend in the next session.
The positive indication comes even as US markets ended lower. The Dow Jones Industrial Average fell 0.43% to 52,960.66, while the S&P 500 declined 0.44% to 7,652. The Nasdaq Composite dropped 0.71% to 26,183.66. Global markets also remained under pressure, with the Stoxx Europe 600 falling 0.7% and the MSCI World Index declining 0.5%.
Despite GIFT Nifty pointing to a positive start, Indian IT ADRs remained weak in US trading. Infosys ADR fell 0.42% to $12.01, while Wipro ADR declined 0.81% to $1.835. The weakness in technology counters could weigh on Indian IT stocks at the opening bell, particularly amid pressure on the Nasdaq and broader global technology shares.
Oil Prices, Yields Keep Markets On Edge
Investor sentiment remained cautious amid concerns that elevated energy prices could fuel inflation and complicate the Federal Reserve's monetary policy outlook. Brent crude was trading 4.82% higher at $92.63 a barrel at 7 p.m. IST, while West Texas Intermediate crude futures rose 2.7% to $88.07 a barrel.
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The US 10-year Treasury yield climbed three basis points to 4.78%, adding to pressure on risk assets. Spot gold declined 2.1% to $4,344.44 an ounce. Global bond yields remained close to their highest levels since 2008 as escalating Middle East tensions raised concerns over potential disruptions to energy flows through the Strait of Hormuz.
US-Iran Tensions Add To Uncertainty
Geopolitical risks also weighed on global markets after US President Donald Trump threatened additional strikes on Iran on Monday. The comments followed direct attacks between the US and Iran on Sunday, marking a fresh escalation in a conflict that had recently shifted towards an economic stand-off.
Concerns intensified after a tanker was struck by three unknown projectiles while transiting the Strait of Hormuz. The UK Maritime Trade Operations agency said the tanker was sailing in the southern shipping lane near the Omani coast. No casualties were reported.
Any further escalation around the Strait of Hormuz could create additional uncertainty around global oil supplies and shipping, potentially keeping energy prices elevated.
The divergence between GIFT Nifty and global markets suggests that Indian equities could show resilience despite the negative overseas handover. However, investors are likely to track IT stocks, crude prices and bond yields closely. The S&P 500 was also dragged lower by a sell-off in chipmakers, adding to pressure on technology stocks.
With September historically considered a challenging month for equities, rising bond yields, elevated crude prices and geopolitical tensions could keep volatility high.
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