Indian Markets Seen Opening Higher on Global Cues as Oil Caps Upside

Mumbai, April 23: Indian markets may get a positive start on Thursday on the back of encouraging cues from the US and Asia but boiling oil may limit the upside.

To be sure, Asian markets are trading higher in their attempt to mirror record highs of Wall Street as investors cheer earnings as well as growth coming off AI. All this is evident in the sprint seen across key indices in Japan, South Korea and Taiwan, aided by technology stocks. But overall, the tone is less than euphoric as rising crude remains a key overhang.

Overnight in the US, the markets closed at fresh record highs as the S&P 500 and Nasdaq extended their rally, on the back of optimism around earnings especially in the technology segment. All this shows corporate America as standing tall despite global uncertainty surrounding geopolitical developments.

Extension of the Iran ceasefire also added to the mood, easing tensions in the Middle East, even as concerns remained over future disruptions in the Strait of Hormuz.

European markets, by contrast, presented a different story as the pan-European STOXX 600 index dippedand major indices such as Germany’s DAX and France’s CAC 40 also ticked lower, with the markets fretting slowdown and inflationary pressures.

While energy and technology stocks found support, aided by higher crude prices and earnings optimism, rate-sensitive sectors and consumer-facing stocks lagged, highlighting underlying fragility in the region’s economic outlook.

Adding to the cautious tone, Germany has trimmed its growth projections and flagged higher inflation, while broader eurozone sentiment indicators remain subdued. This has reinforced expectations that monetary conditions in the region could remain tighter for longer, even as growth momentum softens.

Crude oil prices remain a key overhang for global markets, with Brent holding above the $100 per barrel mark amid ongoing geopolitical tensions. Elevated oil prices are fuelling inflation concerns globally and complicating the outlook for central banks, which may be forced to maintain a tighter policy stance for longer than previously anticipated. For India, as a major importer of crude, sustained high prices pose risks to both macro stability and corporate margins.

Against this backdrop, Indian markets are expected to take cues from the positive momentum in US and Asian equities at the open. However, the combination of high oil prices, mixed signals from Europe, and persistent geopolitical uncertainties is likely to keep investors cautious, potentially limiting the extent of early gains and leading to a more measured start to trade.

Source:

• Exchanges