Indian equity markets are gearing up for a robust recovery on Friday, December 19, with key indices Sensex and Nifty 50 projected to open in positive territory. This anticipated upswing follows four consecutive sessions of decline and is primarily driven by a significant improvement in global market sentiment.
Global Tailwinds Fuel Domestic Optimism
The positive shift in mood stems from strong overnight gains on Wall Street, where equities rallied after softer-than-expected US inflation data for November strengthened expectations of imminent interest rate cuts by the US Federal Reserve. Asian markets mirrored this optimism, with Japan's Topix and Australia's S&P/ASX 200 both advancing by 0.5% in early trade. Hong Kong futures also climbed.
This global cheer is directly reflected in the early indicators for the Indian market. The Gift Nifty was trading near the 25,933 level, marking a gain of 60 points or 0.236% from the previous close of Nifty futures. This signals a firm and recovery-driven opening for the domestic benchmarks.
Recapping a Subdued Previous Session
The rally comes after a largely flat close on Thursday, December 18, where the absence of fresh catalysts kept investor activity muted. The Sensex ended at 84,481.81, down 78 points or 0.09%, while the Nifty 50 settled at 25,815.55, dipping a marginal 3 points.
Vinod Nair, Head of Research at Geojit Investments Limited, noted that domestic equities moved through a volatile session. "After three consecutive declines, early gains were supported by value buying and a rupee recovery," he said. However, he added that uncertainty surrounding a potential U.S.–India trade deal later prompted profit-booking, capping the gains. Sector-wise, IT and financial services saw interest, while auto, oil & gas, and pharma stocks weakened.
Key Global Developments Influencing Markets
A confluence of international economic events is shaping market direction:
US Inflation & Wall Street: The delayed Consumer Price Index report showed inflation rose 2.7% year-on-year in November, cooler than the anticipated 3.1%. This fueled a rally on Wall Street, with the Nasdaq Composite jumping 1.38% and the S&P 500 gaining 0.79%.
Central Bank Actions: The Bank of England cut its key rate by 25 basis points to 3.75% in a narrow 5-4 vote. In contrast, the European Central Bank held rates steady for the fourth consecutive meeting. The Bank of Japan is widely expected to raise rates later today.
Commodity Movements: Gold prices hovered near a record high around $4,335 an ounce, supported by rate cut bets and geopolitical tensions. Meanwhile, crude oil prices extended their weekly decline, with Brent slipping below $60 a barrel amid concerns over a supply glut.
As trading commences, investors will digest these global cues while looking ahead to further data and central bank commentary for clearer directional trends. The sharp improvement in sentiment suggests Indian markets are poised to recoup recent losses, led by the positive momentum from international peers.
