Nifty, Sensex Tick Up At Pre-Open Suggesting A Higher Start As Markets Look To Extend Rally 

Mumbai, November 4: Indian shares edged higher at pre open signalling an uptick at the start as markets look to extend gains and investors await US midterm election results. 

Nifty 50 was up 0.17% and Sensex was up 0.16% at pre open.  

The US midterm election outcome could have significant implications for several global market drivers, including the conflict in the Middle East and energy prices, investments in artificial intelligence infrastructure and the country’s fiscal trajectory. These developments are particularly relevant for Indian equities, which have faced pressure from elevated crude prices and relatively limited participation in the global AI-led rally.  

Domestic benchmarks have nevertheless staged a strong recovery, with the Nifty 50 and BSE Sensex climbing around 5% over the past four sessions to close at two-month highs on Tuesday. Improving corporate earnings, a retreat in crude oil prices and tentative signs of a turnaround in foreign fund flows have helped underpin the rebound.  

Provisional exchange data showed that foreign portfolio investors (FPIs) were net buyers of Indian equities worth Rs 6,837 crore on Tuesday. They have recorded net purchases in five of the past six trading sessions, signalling a possible improvement in overseas investor sentiment towards domestic markets.  

The National Stock Exchange of India (NSE) reported a 23% year-on-year increase in second-quarter profit, supported by higher trading volumes in the cash market.  

Footwear retailer Bata India posted a 30.4% jump in second-quarter profit, driven by robust demand for its premium footwear range, including shoes and sneakers.  

Equitas Small Finance Bank appointed Balaji Nuthalapadi as interim chief executive officer following the resignation of long-serving CEO P N Vasudevan over conflict-of-interest concerns. 

Asian Markets 

Asian equities witnessed broad-based losses on Wednesday as investors reacted to early indications from the US midterm elections and reassessed their exposure to technology stocks. South Korea’s Kospi plunged 3.4%, extending the previous session’s losses, while Japan’s Nikkei 225 declined 3.6% and the broader Topix shed 2.5%. Australia’s ASX 200 was also trading 0.8% lower. 

The weakness came as investors weighed the potential implications of the US election outcome for fiscal policy, trade relations and government spending. Early indications pointed towards a possible Democratic victory over Republicans, adding to uncertainty over the direction of US economic policy. 

Technology stocks remained a key source of concern, with investors questioning the sustainability of artificial intelligence-led investments, elevated capital expenditure and the ability of companies to generate adequate returns from these investments. The weakness in Asian technology-heavy markets also reflected concerns over the durability of the global equity rally. 

US Markets 

Overnight, Wall Street ended mixed, with gains in technology and artificial intelligence-linked stocks helping the Nasdaq and S&P 500 advance, while the Dow Jones Industrial Average closed lower. The Nasdaq Composite rose 0.83% to 25,372.01, while the S&P 500 gained 0.36% to 7,568.92. The Dow fell 0.38% to 51,786.72. 

Gains in technology stocks helped offset weakness across other segments of the market. Apple remained under pressure after flagging higher memory-chip costs as a potential drag on margins during the crucial holiday quarter. Its outlook for services revenue growth also disappointed investors, adding to concerns over the near-term earnings trajectory of the technology major. 

US stock futures weakened during Asian trading, with S&P 500 futures down 1.2% and Nasdaq futures losing 2.1%, signalling a cautious mood ahead of the midterm election results. Investors are also monitoring the US Treasury’s quarterly refunding announcement and its potential implications for bond yields and financial conditions. 

Crude Oil 

Crude oil prices remained volatile, with traders weighing prospects of a diplomatic breakthrough in the Middle East against the risk of further supply disruptions. Brent crude settled 0.86% lower at $102.70 a barrel on Tuesday, extending its retreat amid hopes of progress in efforts to end the conflict involving Iran. 

However, uncertainty surrounding the security of the Strait of Hormuz, a critical shipping route accounting for roughly a fifth of global oil supplies, continues to keep markets on edge. 

The possibility of an easing in geopolitical tensions has helped unwind some of the risk premium in crude prices. However, any renewed disruption to shipments could quickly reverse the decline. For India, which relies heavily on imported crude, lower oil prices offer relief on the inflation, current account deficit and rupee fronts, while potentially supporting the margins of oil marketing companies and other energy-intensive businesses. 

Source

• Exchanges