Pre-Open Points To Uptick At Start Despite Asia Plunge On US Inflation

Mumbai, October 16: Indian shares rose at pre open signalling a higher start even as Asian shares plunged after hotter than expected US inflation raised the spectre of more rate hikes. 

Nifty 50 rose 0.16% while Sensex climbed 0.19% at pre open.  

Higher US interest rates could further weaken the appeal of Indian equities for foreign investors, who have remained net sellers for 14 consecutive sessions through Wednesday. Their year-to-date withdrawals have climbed to a record $32.7 billion, intensifying pressure on domestic stocks.  

Investors will now turn their attention to corporate earnings, with Wipro scheduled to announce its September-quarter results later on Thursday. After HCL Technologies delivered better-than-expected earnings earlier this week, triggering a rally in IT stocks, Wipro’s commentary on discretionary technology spending, deal conversions and operating margins will be closely watched for clues about demand in the sector.  

Meanwhile, a busy primary market could absorb liquidity that might otherwise flow into listed equities, potentially capping near-term gains. Jio Platforms on Wednesday unveiled plans to raise up to $3.2 billion through what could become India’s largest-ever initial public offering. The Mukesh Ambani-led company is targeting a valuation of around $108.3 billion, with a proposed price band of Rs 1,065-1,119 per share.  

The Indian government has approved a deal under which Canada’s Fairfax Financial Holdings will acquire a majority stake in IDBI Bank for Rs 52,878 crore.  

HDB Financial Services, a non-banking lender, reported an increase in quarterly profit, supported by loan demand and lower provisions.  

Tata Technologies, an engineering services company, posted a marginal rise in second-quarter profit and projected double-digit revenue growth for the full financial year.  

ICICI Lombard, a general insurer, reported higher second-quarter profit, aided by tax breaks that supported demand for motor and health insurance.  

CEAT, a tyre maker, reported a decline in September-quarter profit as rubber costs climbed amid supply shortages and adverse weather conditions in key producing countries. 

Asia Markets Slide 

Asian equities tumbled in early trade, with MSCI’s broadest index of Asia-Pacific shares outside Japan falling 3.3%. South Korea’s KOSPI plunged 7.8%, while Japan’s Nikkei 225 declined 4.8%. S&P 500 E-mini futures fell 0.4%, signalling continued weakness in global risk appetite. 

Technology stocks led the sell-off as investors reassessed valuations and funding risks in the artificial intelligence sector following the latest US inflation data. The sharp losses across Asian markets came after Wall Street ended lower for a third consecutive session, reflecting growing concerns over borrowing costs and stretched technology valuations. 

Wall Street Falls As Inflation Fuels Rate-Hike Fears 

US stocks closed sharply lower on Wednesday after consumer price inflation accelerated more than expected in September, raising concerns that the Federal Reserve could increase interest rates as early as its October 28 policy meeting. 

The S&P 500 declined 1.1%, while the Nasdaq Composite tumbled 1.9%. The semiconductor index extended its losing streak to six sessions as investors moved away from technology stocks vulnerable to higher borrowing costs. 

Oracle and CoreWeave came under pressure amid concerns over the financing requirements and investment timelines associated with artificial intelligence infrastructure. Investors are also awaiting US producer price and retail sales data, along with comments from Federal Reserve officials, for further clues on the interest rate outlook. 

The prospect of tighter monetary policy has added to uncertainty across global equities, with investors reassessing the outlook for economic growth and corporate earnings. 

Crude Oil Remains Elevated Amid West Asia Tensions 

Crude oil prices remain a key concern for investors, particularly in India, which depends heavily on imports to meet its energy requirements. Supply concerns have intensified after two vessels were struck in the Strait of Hormuz and Iranian officials signalled new tactics targeting shipping. 

Although oil prices eased in early Thursday trade, Brent crude remained around $104 a barrel. Sustained high prices could widen India’s import bill, put pressure on the rupee and complicate the inflation outlook, while squeezing margins for oil-sensitive companies. 

Source

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