Nifty Declines, Sensex Flat at Pre Open as Fed Rate Fears Drag Global Sentiment

Mumbai, June 24:Indian shares traded negative to flat at pre-open as global sentiment took a hit from fears that the US central bank may raise rates later this year.

Expectations of higher U.S. interest rates may curb foreign investment into emerging markets such as India and weaken the outlook for U.S.-facing sectors by raising concerns over growth in the world’s largest economy.

Nifty 50 traded 0.2% lower while Sensex declined 0.04% at pre-open as Gift Nifty dipped 0.09%.

To be sure, Indian markets had crashed yesterday as investors booked profits after gains over the previous seven sessions.

Going ahead, news of monsoon reviving may help sentiment. Spotlight will be falling on Indian Railway Finance Corp, Wipro, NLC India, and Indian Oil Corporation. Indian Railway Finance Corporation will be in focus after the government announced plans to offload up to 2% of its stake through an offer-for-sale route. Wipro deepened ties with Palo Alto Networks and deferred the closing of its Alpha Net Consulting acquisition to September 30. NLC India and Indian Oil Corporation entered into a partnership to develop large-scale renewable energy assets in Tamil Nadu.

As for global cues, Asian equities traded mixed, reflecting investor caution after a technology-led selloff in global markets. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1%, though performance across regional markets remained uneven.

South Korean shares gained 1.5%, recovering part of the previous session’s steep losses as bargain hunting emerged in semiconductor and technology stocks. In contrast, Japan’s Nikkei slipped 0.4% as investors remained wary of elevated valuations in growth-oriented sectors amid uncertainty surrounding global monetary policy.

Meanwhile, oil prices extended their decline after progress in U.S.-Iran talks eased concerns over potential disruptions to crude flows through the Strait of Hormuz. The drop in oil prices provided support to broader market sentiment, particularly for major energy-importing economies such as India, where lower crude prices help ease inflationary pressures and reduce input costs for businesses.

Overnight, U.S. markets ended sharply lower as technology stocks came under pressure.

The Nasdaq Composite tumbled more than 2%, while the S&P 500 also finished in negative territory as investors reassessed lofty valuations in artificial intelligence-linked companies and questioned the sustainability of heavy AI-related spending.

Sentiment was further dented by growing expectations that the U.S. Federal Reserve could keep interest rates elevated for longer if inflation remains sticky. Higher borrowing costs tend to weigh on growth stocks, prompting broad-based profit-taking across the technology sector.

The weakness in U.S. technology shares could spill over to Indian IT stocks, which derive a significant portion of their revenue from North America.

European equities followed Wall Street lower, with the pan-European STOXX 600 index closing in the red as technology and semiconductor stocks led declines.

Investors remained focused on the outlook for global interest rates and the potential implications for economic growth and corporate earnings, while gains in defensive sectors such as healthcare and consumer staples failed to offset broader market weakness.

Source:

• Exchanges