Indian Markets Set for Lower Open Amid Global Weakness

Indian equity markets demonstrated resilience on Thursday, with both benchmark indices closing firmly in positive territory. The Sensex gained 398.44 points, representing a 0.49% increase to close at 82,172.10, while the Nifty 50 advanced by 135.65 points, or 0.54%, settling at 25,181.80. This upward movement was supported by broad-based buying across multiple sectors, indicating healthy domestic participation.

However, the positive momentum appears set to reverse on Friday, with Gift Nifty trading near 25,238 – approximately 36 points lower than the previous Nifty futures close. This key indicator suggests a negative opening for Indian markets as traders respond to weak global cues. The divergence between Thursday’s domestic strength and Friday’s anticipated weakness highlights the increasing influence of international market dynamics on local sentiment.

Overnight declines in US markets have set a cautious tone for Asian trading sessions. The Dow Jones Industrial Average slumped by 243.36 points, or 0.52%, closing at 46,358.42, while the S&P 500 declined by 18.61 points, representing a 0.28% drop to 6,735.11. The Nasdaq Composite showed relative resilience but still finished lower by 18.75 points, a marginal 0.08% decrease to 23,024.63.

This consolidation in US markets reflects investor caution ahead of the third-quarter earnings season, with market participants taking profits and repositioning portfolios. The weakness extended to Asian markets, which traded mostly in the red during early Friday sessions, creating additional headwinds for Indian equities. The synchronized decline across major global indices underscores the interconnected nature of modern financial markets.

Commodity markets presented a mixed picture, with energy and precious metals moving in opposite directions. Brent crude gained 0.1% to $65.31 per barrel, while US West Texas Intermediate crude advanced 0.2% to $61.63 per barrel, indicating steady demand expectations despite global economic concerns.

In contrast, precious metals experienced significant volatility. Gold prices dropped 2% on Thursday, slipping below the psychologically important $4,000 per ounce mark that was breached for the first time in the previous session. Spot gold was trading 2% lower at $3,959.48 per ounce, while US gold futures declined more sharply by 2.4% to $3,972.6. Silver prices also retreated from their record high of $51.22 per ounce, though specific closing levels weren’t provided in the source data.

Multiple geopolitical developments are influencing global market sentiment. Israel’s government approved a ceasefire agreement with Hamas on Friday, paving the way to halt hostilities in Gaza within 24 hours and begin releasing Israeli hostages within the following 72 hours. This development typically reduces geopolitical risk premiums but also introduces uncertainty about implementation timelines.

Meanwhile, the Russia-Ukraine conflict escalated with a large-scale Russian missile strike early Friday that ignited a fire in a high-rise apartment building in central Kyiv and targeted several energy facilities. Ukraine’s Energy Minister Svitlana Grynchuk confirmed that Russian forces continued attacking energy infrastructure, with emergency crews working to reduce the impact of these strikes.

Economic data also contributed to market nervousness. US jobless claims rose again last week, with initial claims increasing to a seasonally adjusted 235,000 for the week ending October 4, up from 224,000 the previous week. Notably, official data releases remain suspended due to the ongoing US government shutdown, now entering its second week, forcing market participants to rely on estimates from institutions like JPMorgan and Goldman Sachs.

Japan’s wholesale inflation maintained its pace in September, rising 2.7% year-on-year, matching August’s rate and exceeding market expectations of a 2.5% increase. The Corporate Goods Price Index, which tracks prices companies charge each other for goods and services, indicates that price pressures remain steady despite moderating global commodity costs.

This persistent inflation in Japan, combined with the mixed signals from other global economic indicators, creates a complex backdrop for Asian markets. The combination of geopolitical tensions, economic data surprises, and commodity price volatility suggests that Indian markets will need to navigate multiple crosscurrents in the coming sessions, with the Gift Nifty’s negative indication serving as an early warning of challenging trading conditions ahead.