Indian Markets Set for Weak Start Despite Global Gains

Despite closing higher on Friday with Sensex surging 223.86 points (0.28%) to 81,207.17 and Nifty 50 gaining 57.95 points (0.23%) to 24,894.25, Indian markets face a potential weak opening on Monday. The Gift Nifty was trading near 24,964, approximately 42 points lower than the previous Nifty futures close, signaling bearish sentiment for the domestic market session ahead. This divergence comes even as Asian markets traded higher, with Japan’s benchmark index touching a record high, creating an unusual disconnect between regional performance and domestic market indicators.

The late-session buying in metal and banking stocks that supported Friday’s gains appears insufficient to counter the broader cautious sentiment. The Gift Nifty’s lower trading level serves as a critical indicator of market expectations, suggesting that domestic factors or specific global concerns may be weighing more heavily on Indian market sentiment than the positive momentum seen in other Asian markets.

While Indian markets show signs of weakness, global markets presented a mixed picture. The US stock market ended mixed on Friday with the Dow Jones Industrial Average surging 238.56 points (0.51%) to close at 46,758.28 and the S&P 500 edging up 0.44 points (0.01%) to end at 6,715.79, both hitting record closing highs. However, the Nasdaq Composite finished lower by 63.54 points (0.28%) at 22,780.51, indicating selective sector performance within US markets.

In commodity markets, gold prices showed strength with spot gold trading 0.4% higher at $3,900.40 per ounce and US gold futures increasing by 0.5% to $3,926.80. Meanwhile, Bitcoin surged to an all-time high of $125,559.21 on Sunday, supported by strong inflows into Bitcoin-linked exchange-traded funds and broader risk-on sentiment amid the US government shutdown concerns. At last check, Bitcoin traded nearly 1% higher at $123,538.23, maintaining its impressive rally.

Multiple significant triggers are poised to influence market direction this week. Developments around the potential US government shutdown remain a key concern for global investors, alongside the upcoming release of US FOMC meeting minutes that could provide crucial insights into the Federal Reserve’s monetary policy trajectory. The Israel-Hamas conflict also enters a critical phase, with both sides beginning preparations for indirect talks in Egypt on Monday, raising hopes for a ceasefire.

Prime Minister Benjamin Netanyahu indicated that a truce and hostage exchange could materialize this week, while former President Donald Trump welcomed Hamas’s statement accepting parts of the US peace proposal. These geopolitical developments could significantly impact global risk sentiment and capital flows. Additionally, economic data showed concerning signs as US services sector activity stalled in September, with the ISM non-manufacturing PMI falling to 50 – the breakeven level – from 52.0 in August, while new orders for services slipped to 50.4 from 56.0 in the previous month.

For Indian markets specifically, investors will closely track Q2 earnings results, ongoing IPO activity, gold price movements, and foreign fund inflow patterns. The combination of domestic corporate performance and global macroeconomic indicators creates a complex investment landscape where careful analysis of multiple data points becomes essential for informed decision-making.

The divergence between Gift Nifty’s indication of a weak opening and Friday’s actual market performance highlights the volatility and uncertainty characterizing current market conditions. With multiple competing factors – from geopolitical tensions to central bank policy signals and corporate earnings – investors face a challenging environment requiring balanced assessment of both domestic strengths and global headwinds as they navigate the week ahead.