Stock markets are expected to open higher on Thursday, taking cues from a recovery in Asian markets after a sharp fall earlier this week. The positive signal comes even as investors remain cautious due to the
At 8:30 am, Gift Nifty futures were trading at 24,677.00. This indicates that the benchmark Nifty 50 may open above Wednesday’s closing level of 24,480.5.
The possible recovery comes after two days of losses in the market. The Nifty has already fallen 2.8% this week and hit a six-month closing low as global markets reacted to the Middle East conflict and rising oil prices.
Asian markets showed a recovery on Thursday. MSCI’s broadest index for Asia-Pacific stocks outside Japan rose 2.6%. This comes after the index had fallen 8.6% in the previous three trading sessions when fears about the Middle East war shook investor confidence.
The rebound in Asia followed gains on Wall Street overnight. Investors found some relief after reports suggested that Iran may be open to talks to end the conflict.
A report by the New York Times said Iranian intelligence operatives had indirectly contacted the CIA a day after the attacks. However, US officials reportedly remain doubtful that a quick de-escalation will happen.
US President Donald Trump also made announcements aimed at calming oil markets. These included providing a US naval escort for oil tankers moving through the Strait of Hormuz and offering political risk insurance.
Crude oil prices remain a key risk for the Indian market. Oil prices rose 2.5% to $83.4 per barrel after ending largely unchanged on Wednesday.
Higher oil prices are usually negative for India as the country is the world’s third-largest importer of crude oil. Rising oil costs can increase the import bill and affect inflation and the current account balance.
Because of this, investors are closely watching the movement in oil prices along with updates from the Middle East.
Institutional trading data shows that foreign investors have continued to sell Indian equities, while domestic investors have provided support.
According to the latest data, foreign institutional investors have been net sellers in the cash market so far this month.
Month till date, FIIs made gross purchases worth Rs 31,858.33 crore and gross sales of Rs 43,906.62 crore. This resulted in a net outflow of Rs 12,048.29 crore.
On March 4, FIIs bought shares worth Rs 19,120.99 crore but sold shares worth Rs 27,873.64 crore, leading to a net selling of Rs 8,752.65 crore.
Earlier on March 2, FIIs purchased equities worth Rs 12,737.34 crore and sold Rs 16,032.98 crore worth of shares, resulting in a net outflow of Rs 3,295.64 crore.
In contrast, domestic institutional investors have continued to buy shares.
Month till date, DIIs recorded gross purchases of Rs 47,370.03 crore and gross sales of Rs 26,707.99 crore. This resulted in a net inflow of Rs 20,662.04 crore.
On March 4, DIIs bought equities worth Rs 26,259.37 crore and sold shares worth Rs 14,191.20 crore, resulting in a net purchase of Rs 12,068.17 crore.
On March 2, DIIs purchased shares worth Rs 21,110.66 crore and sold Rs 12,516.79 crore worth of equities. This resulted in a net inflow of Rs 8,593.87 crore.
The steady buying by domestic investors has helped support the market even as foreign investors remain cautious.
Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said markets may remain cautious due to global uncertainties.
“Markets are likely to remain cautious in the near term as evolving war developments and shifting geopolitical dynamics continue to create uncertainty and keep investor sentiments fragile.”
“With sentiment turning cautious, participants may prefer a selective approach while monitoring incoming global cues.”
He added that some domestic sectors could still see interest.
“Amid prevailing uncertainties, we suggest investors to shift focus towards domestic themes, upstream Oil&Gas companies which is expected to benefit from elevated energy prices, and defence may remain in focus on the back expectations of increased defence spending.”
Vinod Nair, Head of Research, Geojit Investments Limited, said investors should avoid panic selling and stay focused on long-term investing.
“We advise investors to avoid panic sell-off and adopt a disciplined, long-term perspective and exercise patience over the next several weeks, as current price levels may offer a strategic entry point for the medium to long term.”
While global cues appear slightly positive for Thursday’s opening, investors are still likely to remain careful during the trading session.
Movement in crude oil prices, updates from the Middle East conflict, and global market trends will continue to influence investor sentiment.
For now, the Gift Nifty signal suggests a higher opening for the Indian market, but volatility may remain during the day as investors react to global developments.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)