are likely to open on a positive note amid a cautious mood, thanks to global trends. Gift Nifty at 23,585 indicates a gap-up opening of about 200 points as global markets rebounded, led by technology stocks.
Hariprasad K, SEBI-registered Research Analyst and Founder, Livelong Wealth, said after days of heightened volatility and sustained selling pressure, global equities are showing signs of short-term stabilisation, which could support sentiment in domestic markets during the opening session.
The rally in US equities helped improve overall risk appetite globally, despite lingering concerns around inflation and expectations that the US could maintain a tighter interest rate stance for longer, he added.
According to Morgan Stanley, with growth acceleration likely in the pipeline and valuations and sentiment at near extremes, Indian equities are poised for a strong year ahead. The key risks to India are mostly external, including geopolitical tensions and slowing global growth. Back home, the global investment advisory firm added that it worries about low productivity in farming.
In a note, PL Private Wealth said valuation comfort across Indian equities has moderated meaningfully following the strong market recovery seen over the past year. While headline valuations have corrected from earlier extremes, pockets of the broader market — particularly speculative small and mid-cap segments — continue to trade at elevated levels relative to earnings visibility.
“Market leadership is increasingly shifting toward quality large caps, where earnings visibility, balance sheet strength and institutional ownership remain stronger. Positioning data also indicates that both foreign and domestic institutional investors are rotating selectively within large-cap segments rather than aggressively expanding risk across the broader market.”
Meanwhile, equities across the Asia-Pacific region are up marginally in early trading on Thursday.
The broader macro environment remains challenging despite the positive opening cues. The Indian rupee weakened further to a fresh record low near 95.79 against the US dollar, reflecting persistent pressure from overseas debt repayments, importer hedging demand, and concerns surrounding India’s current account balance amid elevated crude oil prices, said Hariprasad.
The prolonged US-Iran conflict and disruptions around the Strait of Hormuz continue to remain major macro risks for India, especially given the country’s dependence on crude imports. Rising energy costs are now beginning to weigh on growth projections, inflation expectations, and currency stability simultaneously, he added.