Indian stocks poised to open lower as US midterm vote outcome looms

Indian stocks are anticipated to commence trading at a lower level on Wednesday, reversing a streak of four consecutive days of gains as market participants await the results of the US midterm election. The ramifications of the US midterm elections may significantly impact the Middle East conflict, energy prices, the deployment of AI data centres, and the US fiscal state, all of which are closely monitored by Indian investors.

Indian shares have been under pressure this year due to higher energy prices and limited exposure to AI-linked stocks. As of 7:51 a.m. IST, the GIFT Nifty futures stood at 23,711, suggesting a less robust opening for the benchmark Nifty 50, which finished at 23,810.85 on Tuesday. Both the Nifty 50 and the BSE Sensex have surged approximately 5% over the preceding four sessions and closed at a two-month high on Tuesday, propelled by robust corporate earnings, declining oil prices, and early signals of a resurgence in foreign investor inflows.

On Tuesday, foreign investors purchased Indian shares worth 68.37 billion rupees ($721.66 million), according to provisional figures. They have been net buyers in five of the past six trading sessions. Brent crude futures were hovering around $103 per barrel on Wednesday, after plummeting to a near four-week low in the preceding session as market participants considered the possibility of ending the wars in Ukraine and Iran.

The prospect of potential reductions in persistent foreign outflows, combined with easing energy prices and optimism concerning possible tax-policy changes, could bolster domestic sentiment, stated Ponmudi R, CEO of wealth tech platform Enrich Money. Asian markets experienced a decline of 0.7%, while US stock futures declined as investors concentrated on the likelihood of Democrats seizing control of Congress from President Donald Trump’s Republicans.