Negative opening likely for Indian stock markets
Analysts said there is no positive triggers at present to revive the market sentiment
Indian stock markets are anticipated to open on a bearish note on Wednesday, according to analysts. The Nifty index, currently at 22,800, suggests a weak start, with futures closing at 22,893 on Tuesday. There are no immediate triggers to boost market sentiment, and selling pressure, particularly from foreign portfolio investors (FPIs), is expected to intensify, pushing markets further down.
The Nifty 50 experienced a 6.3% crash, marking the worst September series since 2001, when it fell by 13.53%. The Reserve Bank of India is expected to raise interest rates at its upcoming meeting, following the U.S. Federal Reserve's hike and Australia's central bankers' move in response to rising global inflation due to surging crude oil prices, exacerbated by the Iran-US war.
Despite the gloomy outlook, WTI crude has dropped to the $89–$90-a-barrel range, while Brent has retreated to $95–$96, offering some relief from macroeconomic pressures. However, foreign investor flows remain a significant headwind, and persistent selling, coupled with elevated U.S. Treasury yields, could limit the recovery of domestic equities.
BofA's economists now anticipate the RBI to initiate a rate-hiking cycle at its October 7 meeting, bringing forward their earlier forecast for a December hike. They now foresee 100 basis points of hikes, taking the repo rate to 6.25% by the first half of 2027, as growing growth and inflation risks prompt a shift away from monetary accommodation.
Global stocks are up sharply in early trading on Wednesday, and analysts expect short-covering to aid market recovery. However, a sustained recovery hinges on the stability of oil prices, global bond yields, and whether foreign selling moderates.
Written by urgent.news from Hindu BusinessLine's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
