Indian equity markets are heading for a weak opening on Thursday as global markets remain bearish. Gift Nifty at 25,880 indicates a marginal decline at open. Analysts expect Japan’s central bank to raise interest rates this Friday, which may trigger the unwinding of the yen carry trade and affect global markets.
Ponmudi R, CEO of Enrich Money, said: Global markets enter today’s session on a cautious footing following a sharp overnight sell-off in the US. “The S&P 500, Nasdaq, and Dow extended their losing streak as investors booked profits in high-valuation technology and AI stocks.”
Renewed skepticism around AI capex returns, reports of funding pullbacks in data-centre investments, and a visible rotation toward defensive sectors have reinforced a risk-off tone, he said adding “Investor sentiment also remains cautious ahead of the release of US consumer price inflation data, with divided views in the market over the future trajectory of monetary policy, prompting participants to stay defe Ansive and avoid aggressive positioning.”
Equities across the Asia-Pacific region are ruling in red, led by Japan’s Nikkei.
Meanwhile, domestic derivative markets also send a negative signal.
Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities, said: “The derivatives landscape reflects a rising undertone of caution.” Call writers have aggressively added fresh positions at at-the-money (ATM) and nearby strikes, reinforcing overhead resistance on every rally. Meanwhile, put writers have partially unwound their positions and rolled them down to lower strikes, pointing toward expectations of prolonged consolidation rather than an imminent breakout or breakdown.
“A notable build-up of nearly 1.68 crore call contracts at the 26,000 strike firmly establishes it as a formidable resistance zone. On the support front, around 69.36 lakh put contracts at the 25,500 strike provide a strong downside cushion. The Put-Call Ratio (PCR) has slipped sharply to 0.55, highlighting increased cautious positioning and indicating that sellers continue to maintain an aggressive stance at higher levels,” he added.
However, with the volatility index, India Vix, dipping below 10 and PCR approaching oversold territory, the possibility of intermittent short-covering cannot be ruled out in the coming sessions, said analysts.