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How will markets open? GIFT Nifty up, Nikkei surges 1% and 7 other cues at this hour

Market Opening Cues: GIFT Nifty Signals Positive Start, Nikkei Surges 1%, and Key Global Indicators to Watch

As Indian equity markets gear up for another trading session, investors are closely monitoring a slew of global and domestic cues that could dictate the opening sentiment. With the benchmark indices like Sensex and Nifty having shown resilience amid volatile global conditions, today's early indicators point towards a potentially upbeat start. Among the standout signals is the GIFT Nifty, which is trading higher, suggesting optimism for the domestic bourses. Meanwhile, Japan's Nikkei has surged by 1%, reflecting broader positive momentum in Asian markets. In this comprehensive overview, we delve into these developments and seven additional cues that are shaping market expectations at this hour.

GIFT Nifty Points to a Bullish Opening

The GIFT Nifty, a key futures contract traded on the NSE International Exchange in Gujarat International Finance Tec-City (GIFT City), is currently indicating a positive opening for the Indian markets. As of the latest updates, GIFT Nifty futures are up by around 50-60 points, signaling that the Nifty 50 index could open higher than its previous close. This metric is particularly valuable for Indian investors as it provides an early gauge of sentiment before the official market hours begin at 9:15 AM IST. The uptick in GIFT Nifty comes amid a backdrop of mixed global signals, but it underscores underlying buying interest, possibly driven by bargain hunting after recent corrections.

GIFT Nifty's performance is often influenced by overnight developments in major global indices, including Wall Street's closing and early Asian trading. For context, this futures index has been a reliable predictor of Nifty's opening moves, with historical data showing a high correlation. Investors should note that while it's a strong indicator, intraday volatility can still sway the actual opening based on real-time news flows, such as corporate earnings or geopolitical updates.

Nikkei Surges 1%: Asian Markets Show Strength

Japan's Nikkei 225 index has climbed over 1% in early trading, providing a boost to regional sentiment. This surge is attributed to positive corporate earnings reports from key Japanese firms and a weakening yen, which benefits exporters. The Nikkei, often seen as a bellwether for Asian equities, closed the previous session on a high note and has extended gains today, potentially influencing other markets in the region.

This development is significant for Indian investors, as Asian markets often set the tone for emerging economies like India. A strong Nikkei can encourage foreign institutional investors (FIIs) to deploy capital in riskier assets, including Indian stocks. However, it's worth monitoring if this momentum sustains, given ongoing concerns about global inflation and interest rate hikes from central banks.

Seven Additional Market Cues to Monitor

Beyond these headline indicators, several other factors are at play. Let's break them down in detail:

US Markets' Overnight Performance: Wall Street ended mixed in the previous session, with the Dow Jones Industrial Average edging higher by 0.2%, while the tech-heavy Nasdaq Composite dipped slightly by 0.1%. The S&P 500 managed a marginal gain of 0.15%. This mixed close reflects ongoing debates over the Federal Reserve's rate path, with recent data showing resilient US economic growth. For Indian markets, a stable Wall Street often translates to reduced volatility, but any hawkish signals from Fed officials could trigger sell-offs in emerging markets.

Oil Prices Stabilize Amid Geopolitical Tensions: Brent crude futures are hovering around $82 per barrel, showing little change from yesterday. Oil prices have been under pressure due to supply concerns from the Middle East and robust US production. For India, a net importer of oil, stable prices are a relief, potentially easing inflationary pressures and supporting sectors like aviation and automobiles. However, any escalation in global conflicts could push prices higher, impacting market sentiment negatively.

Currency Movements: Rupee's Trajectory: The Indian rupee is expected to open flat to slightly stronger against the US dollar, trading around 83.10-83.20 levels. This stability comes after the rupee appreciated marginally in the previous session, aided by dollar inflows. A stronger rupee benefits importers and could attract more foreign investment, but persistent dollar strength globally might cap gains. Forex traders are watching the dollar index, which is steady near 104, for further clues.

Bond Yields and Interest Rate Expectations: US 10-year Treasury yields have eased to around 4.1%, reflecting some cooling in rate hike fears. In India, government bond yields are stable at 7.05% for the 10-year benchmark. Lower yields could encourage equity investments by making stocks more attractive compared to fixed-income options. Market participants are eyeing upcoming central bank meetings, including the RBI's policy review, for hints on domestic rates.

FII and DII Activity: Foreign institutional investors were net sellers in the Indian markets yesterday, offloading equities worth approximately Rs 1,200 crore, while domestic institutional investors (DIIs) countered with buys of Rs 1,500 crore. This tug-of-war highlights the cautious stance of global funds amid high valuations, but strong DII support has been a pillar for the indices. Sustained FII outflows could pressure the markets, especially in large-cap stocks.

Sector-Specific Developments: In the technology sector, positive earnings from US giants like Microsoft and Alphabet are spilling over, potentially lifting Indian IT stocks such as Infosys and TCS. Meanwhile, banking shares might see interest following reports of robust credit growth. On the flip side, metal stocks could face headwinds if commodity prices weaken further due to slowdown fears in China.

Global Economic Data Releases: Investors are awaiting key data points, including US jobless claims and Eurozone inflation figures later today. Closer to home, India's manufacturing PMI data is due, which could influence sentiment in industrial sectors. Positive data might reinforce the narrative of economic recovery, bolstering market confidence.

Broader Market Context and Outlook

Putting it all together, the combination of a rising GIFT Nifty and a surging Nikkei suggests Indian markets could open on a positive note, potentially extending gains from the previous session where the Sensex rose by 200 points to close above 71,000. However, caution is advised as global uncertainties persist, including the US presidential elections' impact on trade policies and ongoing supply chain disruptions.

Analysts recommend focusing on fundamentally strong stocks, particularly in consumption-driven sectors, amid expectations of a pre-budget rally. The Nifty's support levels are seen at 21,300, with resistance at 21,600. Volatility, as measured by the India VIX, remains elevated at around 15, indicating potential swings.

In summary, while the cues lean positive, traders should stay vigilant for any surprises. As always, diversification and risk management are key in navigating these dynamic markets. Stay tuned for live updates as the trading day unfolds.

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Read the Full The Financial Express Article at:
[ https://www.financialexpress.com/market/how-will-markets-open-gift-nifty-up-nikkei-surges-1-and-7-other-cues-at-this-hour-3924811/ ]