GIFT Nifty Points to Positive Market Opening Following Sharp Selloff

Indian benchmark indices Sensex and Nifty are likely to open higher today, with GIFT Nifty signalling a positive start after Thursday's sharp selloff pushed the Nifty to its lowest level of 2026. GIFT Nifty traded at 22,366 around 8 am, up 111 points or 0.5 percent. Indian equities suffered heavy losses on Thursday, as the Sensex plunged 1,072 points to 71,566 and the Nifty declined 371 points to 22,232 after touching a fresh 2026 low of 22,180.

Market Pressures

Foreign institutional investors sold equities worth Rs 12,943.58 crore on Thursday, while domestic institutions bought shares worth Rs 10,703.11 crore. Weak Asian markets, elevated crude oil prices, rising global bond yields and persistent foreign institutional selling could limit the recovery. The Reserve Bank of India's recent interest-rate hike and continued pressure on the rupee are also weighing on sentiment. Ponmudi R, CEO of Enrich Money, stated that the RBI's 25-basis-point repo rate increase to 5.50 percent, its first hike in nearly four years, continues to weigh on sentiment by raising concerns over tighter domestic financial conditions. Ponmudi noted that foreign portfolio investors have extended their selling streak to ten consecutive sessions, while the rupee remains under pressure near Rs 96.80 against the US dollar.

Global Factors

Asian equities declined and headed for a second consecutive weekly loss due to concerns over elevated energy prices, volatility in sovereign bond markets, and artificial intelligence investment funding requirements. Sentiment also weakened after a report that OpenAI's annualised revenue was $20 billion below prior indications. MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.16 percent, Japan's Nikkei fell over 1 percent, and markets in South Korea and Taiwan were closed for holidays. US equities ended mostly lower on Thursday amid surging crude prices, renewed inflation concerns, and expectations of higher interest rates. The Nasdaq dropped 1.25 percent to 27,193.34, the S&P 500 slipped 0.47 percent to 7,765.36, and the Dow Jones rose 0.10 percent to 51,231.64. Crude oil prices remained elevated after surging over 4 percent due to Middle East tensions and supply disruption fears. Brent crude traded around $103.70 a barrel, driven by concerns over the ongoing Iran war and a hurricane approaching the US Gulf Coast. US President Donald Trump stated Washington would not launch an attack on Iran before November's midterm elections, though traders remained sceptical.

Context

Stock markets often react strongly to sudden shifts in global commodity prices, foreign investor capital flows, and domestic monetary policy changes like central bank interest rate hikes. When key economic indicators such as crude oil prices and currency exchange rates move sharply, broader market sentiment across domestic indices tends to follow closely.