Gift Nifty Signals Muted Open for Sensex, Nifty on Wednesday

Mumbai, October 14: Indian equity markets are set for a muted open on Wednesday, with Gift Nifty futures pointing to a start barely above Tuesday’s close. The previous session’s sharp rally in information technology stocks is being tested by mixed Asian markets, a weaker Wall Street and rising oil prices. 

Iran is changing how it targets ships near the Strait of Hormuz to keep oil prices high and sway the US midterm elections, two senior Iranian officials told Reuters. Brent crude rose 1.10 per cent to $106.85 a barrel, adding to worries over India’s import bill. 

Asian stocks were mixed on Wednesday morning, with Australia’s ASX 200 down 0.95 per cent and Hong Kong’s Hang Seng down 0.19 per cent, while South Korea’s Kospi rose 1.33 per cent. US markets ended lower on Tuesday, with the Dow Jones Industrial Average down 0.35 per cent, the Nasdaq Composite down 0.15 per cent and the S&P 500 down 0.02 per cent. 

Gift Nifty futures for the near-month October 27 contract were trading at 22,762.00, down 11.50 points or 0.05 per cent, as of 7:43 am IST on Wednesday. That is 40.05 points above the Nifty 50’s Tuesday close of 22,721.95, pointing to a muted start, a shade above the previous close. 

Foreign flows and inflation remain in focus. Foreign investors sold Indian shares for a 12th straight session on Monday, taking October outflows to about $4.9 billion, while retail inflation rose to 5.54 per cent in September, close to the Reserve Bank of India’s (RBI) 6 per cent upper tolerance limit. 

Oil Prices 

Oil prices climbed on Wednesday, with Brent crude at $106.85 a barrel, up $1.16 or 1.10 per cent, and West Texas Intermediate (WTI) at $95.17, up $1.03 or 1.09 per cent, per OilPrice.com data delayed by 10 minutes. The rise followed Reuters’ report that Iran has expanded its attacks on shipping, which have surged to their highest level since the war began, per independent data. One Iranian official said Tehran would not let US President Donald Trump bring prices down before the November elections. 

Iran War 

Two senior Iranian officials said Tehran began using different offensive tactics against vessels that violate its restrictions about 10 days ago, changing both the type and pace of attacks, and will extend operations to the Gulf of Oman and beyond. A US military official said Iran’s Revolutionary Guards are now also using unarmed spotters in small boats to identify targets after US forces destroyed much of Iran’s radar capability. Maritime security sources counted at least five incidents involving tankers and other commercial ships around Hormuz in the past 48 hours, including drone strikes. Trump has said he will not attack Iran again before the vote, while the US continues its naval blockade of Iranian ports. 

Asian Markets 

Asian markets were mixed on Wednesday morning. Australia’s ASX 200 fell 0.95 per cent to 8,700.10, Shenzhen lost 0.31 per cent to 12,315.91, Hong Kong’s Hang Seng slipped 0.19 per cent to 24,299.67 and the SGX-CNBC China Growth index eased 0.16 per cent to 1,435.70. South Korea’s Kospi gained 1.33 per cent to 6,115.43, Taiwan rose 1.30 per cent to 48,971.62, Japan’s Nikkei 225 added 0.63 per cent to 68,204.39 and Malaysia advanced 0.76 per cent to 1,635.66. Shanghai edged up 0.08 per cent, while Singapore and New Zealand were little changed. 

US Markets 

Wall Street ended lower on Tuesday, with the Dow Jones Industrial Average falling 180.45 points, or 0.35 per cent, to 51,670.10 and the Nasdaq Composite shedding 0.15 per cent to 27,204.38. The S&P 500 slipped 0.02 per cent to 7,805.45, while the Nasdaq 100 lost 0.31 per cent and the Russell 2000 declined 0.40 per cent. The VIX volatility index rose 0.39 per cent to 15.27. 

Tuesday’s Close 

The Sensex jumped 1,109.10 points, or 1.54 per cent, to close at 73,033.78 on Tuesday, while the Nifty 50 advanced 358.60 points, or 1.60 per cent, to settle at 22,721.95, led by a rally in IT stocks after HCL Technologies’ (HCLTECH) September-quarter net profit rose 21.2 per cent year-on-year. The Nifty IT index surged 5.2 per cent, with HCL Technologies, Tata Consultancy Services (TCS), Tech Mahindra (TECHM), Infosys (INFY) and Shriram Finance (SHRIRAMFIN) among the biggest Nifty 50 gainers. Eternal (ETERNAL), Kotak Mahindra Bank (KOTAKBANK), Max Healthcare (MAXHEALTH), Power Grid Corporation (POWERGRID) and Maruti Suzuki (MARUTI) were among the biggest laggards. Market breadth was positive, with 2,303 stocks advancing, 1,711 declining and 162 unchanged, and all sectoral indices except energy and pharma ended higher. 

 Sources

• Gift Nifty
• NSE data
• BSE
• Reuters
• CNBC
• OilPrice.com