Domestic markets are likely to open on a stable note on Thursday, amid positive global cues.
Ponmudi R, CEO of Enrich Money said Global equity markets, particularly in the U.S., have witnessed a strong rebound, driven by easing geopolitical tensions and optimism around corporate earnings. Asian markets are also trading higher, further reinforcing the positive global backdrop. Earlier, sustained FII outflows triggered by elevated oil prices and geopolitical uncertainty had weighed on Indian equities. However, recent sessions indicate signs of stabilization, with foreign institutional investors turning marginal net buyers, contributing approximately ₹666 crore in the previous session.
Gift Nifty at 24,355 (7: 15 am IST) signals a gap up opening of 100 points for Nifty.
Domestic brokerage PL Capital, in an outlook note, said It is important to be careful of international events that may affect issues like inflation, fiscal deficits, and profit margins through their spill-over effects. According to Amnish Aggarwal, Co-Head – Institutional Equities, the last two weeks have been extremely volatile, and this was caused by increased geopolitical tension between the US, Israel, and Iran.
“India has stayed quite resilient despite all those risks because of certain governmental policies like cuts in oil taxes; however, the second order effect of higher crude prices may still emerge.Inflation might increase significantly within the next few months, and expectations for growth and profits may be adjusted accordingly,” he said.
Meanwhile equities across the Asia are up, led by Nikkei which is up nearly 2 per cent.
Overall, market sentiment has shifted towards a positive bias with cautious optimism, primarily supported by softer crude prices and improving global cues., said Ponmudi. “That said, the environment remains highly news-driven. The sustainability of the ongoing recovery will depend on continued de-escalation in geopolitical tensions, stability in crude oil prices, and consistency in FII flows. In the near term, volatility is expected to persist, with markets likely to remain sensitive to any fresh geopolitical developments,” he added.