Pre-open Points to Lower Start for Sensex, Nifty After Five-day Rally

Mumbai, June 19: Indian shares traded lower at pre-open on Friday signalling a negative start for benchmark indices as traders look to book profits after a five-day rally.  

Nifty 50 traded 0.5% lower at pre-open while the Sensex declined 0.08% even as Gift Nifty traded at 23,993, which is below Nifty 50’s Thursday close of 24,168.  

To be sure, the benchmarks’ five-session winning streak was largely fuelled by a sharp retreat in crude oil prices after the United States and Iran reached an interim peace agreement, easing concerns over inflation and India’s current account deficit as the world’s third-largest crude importer.  

IT stocks may remain under pressure after consulting and technology services giant Accenture projected quarterly revenue below Wall Street expectations and disclosed a $400 million hit to its Middle East operations from the Iran conflict in the third quarter, while cautioning that the impact could extend into the fourth quarter.  

Spotlight will also be falling on Bharat Forge and Wipro. Bharat Forge said its subsidiary has entered into a strategic partnership with AM General to jointly develop and supply mounted artillery gun systems. Wipro said it has completed a multi-year data centre migration programme for Metro AG. Separately, the IT services company said it will acquire an additional 20% stake in Aggne Global IT Services for $2.1 million. 

 As for global cues, Asian stocks advanced, with Japan’s Nikkei and South Korea’s Kospi scaling fresh record highs after the United States and Iran reached an interim peace deal earlier this week. The agreement has eased concerns over a broader conflict in the Middle East and reduced fears of disruptions to global trade and energy supplies. 

Improving geopolitical sentiment has encouraged investors to return to risk assets, lifting equities across the region. The positive momentum in Asian markets is likely to provide support to Indian shares at the start of trade. 

Crude oil prices remained under pressure as shipping activity through the Strait of Hormuz continued to normalize. 

Brent crude hovered around $79 per barrel, while U.S. West Texas Intermediate crude traded near $75 after tanker movements resumed through the key energy corridor. The restoration of supply flows has eased concerns about potential shortages that had pushed prices higher during the conflict. 

Lower oil prices are generally viewed as favourable for India, which imports the bulk of its crude requirements. Softer energy costs could help contain inflation, improve the country’s trade balance and support economic growth. 

Oil-sensitive sectors, including aviation, paints, chemicals, cement and oil marketing companies, may remain in focus. The decline in fuel costs could also bolster consumer spending and improve sentiment toward domestic demand-driven sectors.U.S. equities ended sharply higher overnight, with investors focusing on easing geopolitical risks and lower energy prices despite concerns over the Federal Reserve’s policy outlook. 

The Nasdaq jumped nearly 2%, while the S&P 500 gained about 1%. Technology stocks led the advance, with semiconductor shares outperforming after optimism surrounding artificial intelligence and chip demand. 

The Philadelphia Semiconductor Index surged 6.4%, helped by a sharp rally in Intel following reports of a partnership with Apple to design and manufacture chips in the United States. 

Investors also took comfort from resilient U.S. economic indicators, particularly a strong labour market, which suggested that growth remains on solid footing even as borrowing costs stay elevated. 

European markets were more subdued, with investors assessing the implications of the Federal Reserve’s hawkish stance on interest rates. 

The pan-European STOXX 600 index slipped 0.3%, snapping a five-session winning streak. Energy and healthcare stocks weighed on the benchmark, while travel and leisure shares benefited from lower oil prices. 

The Bank of England left interest rates unchanged, but uncertainty surrounding the future trajectory of global monetary policy continued to temper investor enthusiasm. 

Meanwhile, a stronger U.S. dollar added another layer of caution for market participants. 

Source

• Exchanges