Nifty, Sensex Surge At Pre-Open Suggesting Jump-Start

Mumbai, November 9: Indian shares surged at pre open signalling a positive start as oil eased on hopes of peace arriving in the Middle East and foreign inflows recording their biggest monthly inflows since September 2024. 

Nifty 50 rose 0.6% and Sensex advanced the same at pre open.   

Indian equity benchmarks, the Nifty 50 and BSE Sensex, witnessed mild profit-booking during Sunday’s special Diwali trading session, taking a breather after a seven-session rally. The two indices had surged around 10.5% over seven sessions till Friday, marking their longest winning streak this year, amid a revival in foreign investor buying, easing crude oil prices and a reversal of the global AI trade. 

Foreign portfolio investors (FPIs) have pumped more than $4.1 billion into Indian equities so far in November. 

Asia higher 

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8%, recouping some of its losses after declining 4.6% last week. Japan’s Nikkei surged 3.4%, while Taiwan’s benchmark Taiex rallied 5.7%, recovering after suffering its steepest weekly decline in two decades. South Korea’s Kospi also advanced 1.7%. 

The rebound came after a turbulent week for technology stocks, with concerns over the profitability of massive AI investments, infrastructure spending and the possibility of tighter US regulation triggering widespread selling in chipmakers and other technology companies. 

Investors are now looking towards earnings from major technology and semiconductor companies, including CoreWeave, Applied Materials and Cisco Systems, for indications of whether the massive investments in AI infrastructure are translating into sustainable returns. 

US equity futures also moved higher on Monday, following a recovery on Wall Street in the previous session. US stocks ended Friday on a firmer note after technology-led selling had weighed on sentiment earlier in the week. Nevertheless, investors remain watchful of the implications of the US midterm election results and the prospect of greater regulatory scrutiny of the technology sector. 

Oil prices 

Crude oil prices retreated, with Brent crude futures slipping to around $98 per barrel, as hopes of progress in negotiations to end the conflict involving Iran eased concerns over potential supply disruptions in the Middle East. 

US President Donald Trump indicated that further attacks on Iran were unlikely as long as negotiations continued to make progress, helping moderate the geopolitical risk premium in crude prices. 

Lower oil prices are particularly significant for India, which relies heavily on imports to meet its energy requirements. A sustained decline in crude prices could help contain domestic inflation, reduce the country’s import bill and ease pressure on the current account and the rupee. 

Fed rate outlook in focus 

The recovery in global equities could, however, face headwinds from changing expectations around US monetary policy. Stronger-than-expected US employment data showed that employers added 165,000 jobs last month, more than twice economists’ expectations. 

The data strengthened expectations of a possible 25-basis-point rate hike by the US Federal Reserve in December, with the probability of such a move climbing to nearly 80%. 

The US dollar also registered its biggest single-day gain in five months. Investors are now awaiting US consumer inflation data due on Tuesday for further indications of the Federal Reserve’s policy trajectory. 

Source

• Exchanges