The Indian stock market is expected to open on a muted note on Friday, after a sharp selloff in the previous session, and amid mixed global market cues. However, investor sentiment is likely to remain cautious amid renewed uncertainty over a potential resolution of the US-Iran war, elevated crude oil prices and rising global bond yields.
The trends on Gift Nifty also signal a mildly positive start for the Indian benchmark indices, Nifty 50 and Sensex, today. The Gift Nifty was trading around 23,137 level, a premium of nearly 28 points from the Nifty futures' previous close.
In the previous session, the Indian stock market crashed, with both the benchmarks slipping 1.6% each.
The Sensex slumped 1,247.71 points, or 1.67%, to close at 73,580.54, while the Nifty 50 settled 383.70 points, or 1.64%, lower at 23,063.10.
“With the market already extending its recent corrective phase, volatility is likely to remain elevated, warranting a selective approach toward stock-specific opportunities and adding shorts aligned with the market trend,” said Ajit Mishra, SVP – research, Religare Broking.
Here are five key factors that may drive the Indian stock market today:
Asian Markets
Asian stock market traded mixed on Friday, tracking overnight muted session on Wall Street, as bond yields spike. Japan's Nikkei 225 gained 0.50% while the Topix rose 0.70%. Hong Kong's Hang Seng index futures indicated a lower opening. Markets in China and South Korea are closed for a holiday.
Wall Street
US stock market ended mixed on Thursday, with the Dow Jones Industrial Average falling for a third straight session, weighed down by a rise in Treasury yields.
The Dow Jones fell 161.61 points, or 0.31%, to 51,349.98, while the S&P 500 eased 0.02% to 7,704.13. The Nasdaq Composite rose 0.01% to 26,939.37.
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US Treasury Yields
US Treasury yields rose to their highest in more than 20 years on worries that elevated energy costs will keep inflation higher. The 30-year Treasury bond yield hit a high of 5.501%, highest since June 2004, while the benchmark 10-year Treasury yield surged to 5.223%, highest since June 2007. The 2-year note yield rose to 4.941%.
SEBI Board Meet
Sebi board approved various proposals, including a comprehensive overhaul of portfolio manager rules and allowing foreign portfolio investors (FPIs) to participate in physically settled, non-agricultural commodity derivative contracts. The board also cleared a proposal permitting portfolio managers to invest in IPOs and primary market debt issuances and allowed REITs and publicly listed InvITs to issue depository receipts (DRs) in permissible overseas jurisdictions.
Crude Oil Prices
Crude oil prices eased after surging about 3% to a one-week high in the previous session, after a Houthi missile attack on Saudi Arabia revived fears of supply disruptions. Brent crude futures fell 0.54% to $106.02 a barrel, WTI crude futures declined 0.88% to $93.78 a barrel.
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