Asia Retreats After Rally, Oil Steady, Wall Street Mixed; India Seen Opening Flat to Positive 

Mumbai, August 6: Indian equity benchmarks are likely to open on a cautiously positive note on Thursday, after profit-booking across Asia. While Wall Street ended mixed overnight with the Dow Jones scaling another record high, European markets notched fresh lifetime highs.  

Investors in India are expected to weigh the mixed global signals alongside domestic triggers. 

Asian markets retreat after rally 

Asian equities traded lower on Thursday as investors locked in profits following the previous session’s technology-led surge.  

Japan’s Nikkei slipped 1.6% after a strong run, while shares in South Korea’s Kospi went down 4% amid softness in semiconductor counters. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.3%. 

Oil prices were stable, easing concerns over imported inflation for energy-consuming economies such as India. 

The Japanese yen remained firm after recent intervention measures, while the dollar hovered near multi-month lows. 

Wall Street ends mixed as Dow hits another record 

U.S. markets delivered a mixed performance overnight, with the Dow Jones Industrial Average closing at a fresh all-time high, supported by optimism that diplomatic efforts in the Middle East could reduce geopolitical risks. 

The broader S&P 500 ended little changed, while the Nasdaq Composite slipped as heavyweight technology stocks weighed on sentiment. Shares of SpaceX declined after investors questioned the near-term returns from its aggressive artificial intelligence spending plans, while Advanced Micro Devices (AMD) also came under pressure, dragging semiconductor stocks lower. 

Investor confidence, however, remained underpinned by expectations that easing geopolitical tensions could keep energy prices contained and improve the outlook for corporate earnings. 

European stocks scale fresh record highs 

European equities extended their winning streak on Wednesday, with the pan-European STOXX 600 index closing at another record high as upbeat corporate earnings outweighed lingering geopolitical uncertainty. 

Mining shares led sectoral gains after gold prices strengthened amid a weaker U.S. dollar. Strong earnings from companies such as Glencore and Heineken boosted investor confidence, while Sandoz also rallied after reporting healthy growth in its biosimilars business. 

Losses in Prudential and Novo Nordisk capped broader advances, but investors largely looked past stock-specific disappointments as improving earnings momentum continued to support valuations. 

Market participants also kept a close watch on developments surrounding U.S.-Iran negotiations after attacks in the Red Sea heightened concerns over global shipping routes. Even so, optimism that diplomatic engagement could prevent a wider escalation helped keep risk appetite intact. 

The resilience in European equities suggests global investors continue to favour risk assets despite geopolitical uncertainties, a trend that could provide a supportive backdrop for emerging markets including India.  

What it means for Indian markets 

For domestic equities, the global setup points to a steady to mildly positive start. Record highs on Wall Street’s Dow and Europe’s benchmark index, coupled with stable oil prices, are supportive for risk sentiment. 

However, the moderation in Asian markets indicates that investors may remain selective after recent gains. Oil marketing companies, airlines and other crude-sensitive sectors may benefit from steady energy prices. 

Foreign institutional investor flows, which have remained supportive in recent sessions, will continue to be closely monitored. Any decline in crude oil prices and easing geopolitical tensions could further improve sentiment toward Indian equities. 

Source

• Exchanges