Indian stock market benchmarks Sensex and Nifty 50 are poised for a negative opening on Friday, mirroring the downward trend in global markets. This comes despite both indices scaling fresh 52-week highs in the previous trading session.
Global Market Pressure Weighs on Indian Indices
Asian markets traded significantly lower on Friday, following overnight losses on Wall Street. Japan's Nikkei 225 tumbled 2.25%, while the Topix index declined 0.72%. South Korea's Kospi index tanked 3.4%, and the Kosdaq plunged 3.01%. Hong Kong Hang Seng index futures also indicated a lower opening.
The negative sentiment is reflected in Gift Nifty trading around 26,154 level, representing a discount of nearly 66 points from the Nifty futures' previous close. This typically signals a weak start for Indian stock market indices.
Wall Street Tech Selloff Triggers Global Decline
US stock markets ended lower on Thursday in a sharp reversal from an early rally, as technology gains faded despite initial boost from Nvidia's earnings. The Dow Jones Industrial Average declined 386.51 points, or 0.84%, to 45,752.26, while the S&P 500 fell 103.40 points, or 1.56%, to 6,538.76. The Nasdaq Composite closed 486.18 points, or 2.15%, lower at 22,078.05.
Major technology stocks witnessed significant selling pressure. Nvidia share price declined 3.15%, AMD shares plunged 7.84%, Amazon stock price dropped 2.49%, Microsoft shares fell 1.6%, Intel stock slid 4.42%, while Palantir Technologies share price tanked 5.85%. Tesla stock price slipped 2.21%.
Domestic and Global Economic Indicators
On the domestic front, India's core infrastructure sector posted zero growth in October, with output flat year-on-year, marking its weakest showing in 14 months. The slowdown follows a steady deceleration, with growth having eased to 3.3% in September and 6.5% in August.
In the US, nonfarm payrolls increased by 119,000 jobs in September after a downwardly revised 4,000 drop in August. This exceeded economist forecasts of 50,000 jobs. However, the US unemployment rate increased to a four-year high of 4.4% in September from 4.3% in August.
Japan's manufacturing activity contracted for a fifth consecutive month in November. The S&P Global flash Japan Manufacturing Purchasing Managers' Index (PMI) rose to 48.8 in November from October's final 48.2, but remained below the 50.0 threshold indicating contraction.
Despite the negative global cues, market experts remain cautiously optimistic about Indian markets. Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd, stated: "We expect the market up-move to continue, tracking domestic cues, global macro data, FII flows and a potential announcement on the India-US trade agreement."
On Thursday, the Indian stock market ended higher, with the Sensex rallying 446.21 points, or 0.52%, to close at 85,632.68, while the Nifty 50 settled 139.50 points, or 0.54%, higher at 26,192.15.
