Indian Markets Set for Weak Start Amid Mixed Global Cues

Monday’s trading session delivered impressive gains for Indian equities, with the Sensex surging 582.95 points (0.72%) to close at 81,790.12 and the Nifty 50 advancing 183.40 points (0.74%) to settle at 25,077.65. This robust performance was primarily driven by strong buying activity in IT and banking stocks, marking a significant milestone as the Nifty 50 closed above the 25,000 level for the first time. However, this momentum appears fragile as market indicators suggest a potential reversal.

The Gift Nifty, a key indicator of market sentiment, was trading near 25,156 – approximately 29 points lower than the previous Nifty futures close. This downward pressure signals investor caution and points toward a weak opening for Indian markets on Tuesday. The subdued domestic sentiment comes despite Monday’s rally, highlighting the ongoing volatility and sensitivity to global developments that characterize current market conditions.

While Asian markets traded in positive territory, Wall Street delivered a mixed performance overnight that adds complexity to the global investment landscape. The Nasdaq Composite and S&P 500 both hit record closing highs, with the Nasdaq gaining 161.16 points (0.71%) to finish at 22,941.67 and the S&P 500 advancing 24.49 points (0.36%) to close at 6,740.28. However, the Dow Jones Industrial Average bucked this trend, declining 63.31 points (0.14%) to settle at 46,694.97.

This divergence in US market performance creates uncertainty for global investors, particularly those in emerging markets like India who often look to Wall Street for directional cues. The contrasting movements between technology-heavy indices and traditional industrial benchmarks reflect ongoing sector rotation and differing expectations about economic growth, interest rates, and corporate earnings.

Gold prices continued their impressive rally, marking the third consecutive session of gains and reaching record highs. Spot gold traded flat at $3,961.64 per ounce while US gold futures increased by 0.2% to $3,985.50. This sustained upward movement in gold reflects growing expectations of additional interest rate cuts by the Federal Reserve amid US economic and political uncertainties, driving investors toward safe-haven assets.

Crude oil markets showed relative stability with Brent crude gaining 0.02% to $65.48 per barrel while US West Texas Intermediate crude traded 0.02% lower at $61.68 per barrel. The minimal movements suggest balanced supply-demand dynamics and cautious trading ahead of potential geopolitical developments that could impact global energy markets.

Several major global events are shaping market sentiment. US President Donald Trump announced a 25% tariff on all medium- and heavy-duty trucks imported into the United States, effective November 1, affecting delivery trucks, garbage trucks, utility vehicles, buses, and semi-trucks. Simultaneously, the US government shutdown remains unresolved, though Trump expressed willingness to collaborate with Democrats on healthcare reform once the shutdown is resolved. In technology sectors, OpenAI and Advanced Micro Devices unveiled a multibillion-dollar partnership to develop AI data centers powered by AMD processors, with OpenAI committing to purchase 6 gigawatts of AMD chips beginning with the MI450 model next year.