Indian benchmark indices Sensex and Nifty are likely to open on a cautious note on Thursday, with GIFT Nifty pointing to a largely flat start after the Nifty fell to a three-month low in the previous session. Brent crude above $101 a barrel, escalating Middle East tensions, rising US Treasury yields and losses across Asian and US equities are likely to keep sentiment under pressure. Investors also await crucial US inflation data for clues on the Federal Reserve's policy path.
GIFT Nifty was trading at 23,489 around 8 am, almost unchanged from its previous day’s close. Indian equities extended their decline on Wednesday as selling intensified across most sectors, particularly IT and realty. The Sensex tumbled 813.35 points, or 1.08 percent, to 74,764.23, while the Nifty fell 203.60 points, or 0.86 percent, to 23,431.50, its lowest level in three months.
Asian equities declined on Thursday. A fresh wave of attacks on shipping in the Middle East heightened concerns over the security of energy supplies, thereby pushing crude above the psychologically important $100 level and raising fresh concerns over inflation and interest rates. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1 percent, while Japan's Nikkei and South Korea's Kospi both dropped more than 1 percent. The regional losses follow declines on Wall Street.
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Crude oil remains the biggest immediate macroeconomic concern for Indian equities. Brent crude climbed as high as $101.94 a barrel on Thursday after breaking through $100 in the previous session for the first time since July. Brent for November settlement was subsequently trading at $101.33, while West Texas Intermediate gained 0.5 percent to $96.56 a barrel.