Pre-open Trade Signals Lower Start for Nifty, Sensex as Oil, Austerity Continue to Weigh

Indian markets traded lower at pre-open suggesting a weak start for benchmark indices as climbing crude prices amid the US-Iran deadlock keep investors on edge ahead of retail inflation data.

Higher oil prices typically raise concerns on inflation, trade gaps, and earnings, especially for autos, aviation, paints, and logistics.

To be sure, Nifty 50 was trading at 23,637.85 in pre open, down 0.75%, while the Sensex was at 75,677, down from previous close of 76,015.28.

Gift Nifty futures showed a similar downtrend, trading at 23,730, again down from previous Nifty close of 23,815.85.

The Nifty 50 and Sensex had fallen 1.5% and 1.7%, respectively, yesterday, with the rupee slumpingto a record low of 95.31 per dollar.Currency slide tends to drag stocks, especially when accompanied by boiling oil, as the negativeworsens the macro backdrop.

Prime Minister Narendra Modi urging austerity over fuel and gold in an attempt to conserve foreign exchange had also affected stocks yesterday and could possibly drag today as well.

The PM’s advisory highlights the challenge of controlling external balances at a time when global cues are spiralling.

More importably, investors are eyeing retail inflation data, which will release later in the day and will show the impact the Iran war has had on prices in India. This could in turn weigh on monetary policy going ahead.

For example, any shock from the inflation data may complicate Reserve Bank of India’s job, particularly if oil remains stubborn going ahead. And in the opposite case scenario, a softer reading could offer much needed relief to rate-sensitive sectors.

Globally, equities remain divided, with Asian markets mixed and European indices largely subdued amid geopolitical uncertainty. US futures have shown a cautious bias as well, reflecting the same oil-driven concerns.

Overall, the setup suggests a range-bound to mildly negative opening bias, with crude trends, currency movement, and inflation data likely to dictate intraday direction. Market participants may prefer a stock-specific approach in the near term, as macro headwinds continue to shape sentiment across emerging markets.

Source:

• Exchanges