Nifty Dips, Sensex Edges Higher At Pre-Open Pointing To Mixed Start As Inflation Weighs 

Mumbai, November 13: Indian shares were mixed at pre open signalling a split start as elevated domestic inflation and crude prices weighed on sentiment. 

Nifty 50 declined 0.12% and Sensex rose 0.2% at pre open.  

India’s inflation trajectory is emerging as a fresh concern for investors, with retail inflation climbing to 6.09% in October, breaching the RBI’s upper tolerance threshold of 6%. The spike, driven largely by rising food prices, has raised the prospect of tighter monetary policy and added to concerns over household consumption. 

Foreign portfolio investors (FPIs) extended their buying streak to a ninth consecutive session on Thursday, pumping Rs 7,831 crore into Indian equities, according to provisional exchange data. November inflows have now crossed the $8 billion mark, the highest monthly tally since December 2020, signalling a sharp revival in foreign investor appetite for domestic stocks.  

The sustained buying has helped the Sensex and Nifty gain 1.1% so far this week, putting both benchmarks on course for a third consecutive weekly advance. The recovery also marks a potential turning point for Indian equities after nearly two years of underperformance against emerging-market peers. 

Elevated crude oil prices and India’s relatively limited representation in the global artificial intelligence trade had been among the factors weighing on domestic markets. However, the recent cooling in enthusiasm for AI stocks, amid concerns over scrutiny of data-centre investments following Democratic gains in the US midterm elections, could help narrow the valuation and performance gap between Indian equities and other emerging markets.  

Ola Electric reported a narrower loss for the September quarter, with cost rationalisation and restructuring efforts helping improve its bottom line. However, the improvement came alongside a 39% contraction in revenue, pointing to demand challenges.  

Vodafone Idea also posted a smaller quarterly loss, helped by an improvement in average revenue per user (ARPU) as subscribers upgraded to higher-value 4G and 5G services.  

Shares of Meesho could see action after reports that SoftBank affiliate SVF II Meerkat (DE) LLC is likely to offload a 1% stake in the e-commerce company through a block deal worth around Rs 1,174 crore.  

Asian markets recover as Nvidia concerns linger 

Asian markets traded higher on Friday, recovering some of the previous session’s losses as investors assessed the fallout from the turmoil surrounding Nvidia and its implications for the broader artificial intelligence trade. 

The MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.6%, recovering part of its 1.3% decline in the previous session. South Korea’s Kospi advanced 1.3%, while Japan’s Nikkei 225 gained 1.6%. The rebound came despite lingering uncertainty surrounding Nvidia and its implications for the global AI supply chain. 

Nvidia’s longtime chief executive Jensen Huang stepped down following revelations involving extramarital affairs, including one involving a suspected Chinese spy. The developments have raised questions about the chipmaker’s leadership, its relationship with Washington and its position at the centre of the global AI infrastructure boom. 

Investors are also assessing potential beneficiaries of the uncertainty. Chipmakers such as AMD and Broadcom could attract interest as investors explore alternatives to Nvidia, suggesting that the disruption could lead to a redistribution of capital within the technology sector rather than an outright retreat from AI investments. 

Wall Street ends lower; futures stage recovery 

US equities closed lower on Thursday as Nvidia’s decline outweighed gains in energy stocks. The Dow Jones Industrial Average fell 0.36% to 52,297.09, while the S&P 500 declined 0.35% to 7,592.40. The Nasdaq Composite lost 0.39% to settle at 25,366.09. 

Nvidia shares fell 4.3%, recovering from an intraday decline of nearly 12%. Other AI-linked stocks also came under pressure, with data-centre companies including Nebius and CoreWeave recording sharp losses. However, Broadcom, AMD and Alphabet advanced. 

US stock futures subsequently recovered in Asian trade, with Nasdaq and S&P 500 futures gaining 0.4% and 0.3%, respectively, offering some respite to global risk sentiment. 

Investors are also monitoring inflation and the Federal Reserve’s policy outlook. Markets are pricing in at least a 25-basis-point rate hike in December, while the possibility of a larger 50-basis-point increase has also entered the conversation amid persistent price pressures. 

Crude oil, dollar remain key headwinds 

Brent crude futures slipped 0.14% to $95.7 per barrel, while US West Texas Intermediate crude fell to $88.3, after both benchmarks surged in the previous session. The earlier rally followed attacks on Saudi energy infrastructure and concerns over disruptions to shipping through the Strait of Hormuz. 

Meanwhile, the US dollar strengthened as Treasury yields climbed, with the 10-year yield touching a three-week high. A stronger dollar and relatively elevated crude prices could complicate the outlook for emerging-market equities, including India, by increasing imported inflation and putting pressure on the rupee. 

Source

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