Nifty may open lower as FII selling offsets relief from softer crude

GIFT Nifty futures were at 22,599 as of 8:43 am, down 60.50 points or 0.27%, signalling a weak start for the Nifty 50. The index closed at 22,620.45 on Wednesday.

In Short

• Nifty likely to open lower due to continued FII selling pressure
• Crude oil prices ease on US-Iran ceasefire hopes, offering some relief
• Nifty and Sensex set for 8th weekly fall amid inflation and rate concerns

Stock market is likely to open lower on Thursday as persistent foreign investor selling continues to weigh on sentiment, although easing crude oil prices and hopes of a US-Iran ceasefire could offer some support.

GIFT Nifty futures were at 22,599 as of 8:43 am, down 60.50 points or 0.27%, signalling a weak start for the Nifty 50. The index closed at 22,620.45 on Wednesday.

Hitesh Tailor, Technical Research Analyst at Choice Broking Private Limited, said, "Indian equities are likely to open on a weak note, with Gift Nifty at 22,601, down 58 points. Global cues remain mixed, with Asian markets trading mostly positive despite a softer close on Wall Street. Investors are tracking the latest US economic data and expectations around the Federal Reserve’s rate path, while the start of the new month may keep domestic sentiment cautious after September’s sharp decline."

Foreign investors remained heavy sellers, offloading Indian shares worth Rs 10,148 crore on Wednesday, according to provisional data. They have sold around $3.6 billion worth of Indian equities over the past five sessions, taking their year-to-date selling to $27.8 billion.

CRUDE OIL EASES ON US-IRAN PEACE HOPES

Crude oil prices offered some relief to markets. Brent crude slipped to around $98 a barrel after Tehran said it had received Washington's response to its latest ceasefire proposal.

India, being one of the world's largest crude importers, remains vulnerable to higher oil prices as they can raise inflation, widen the import bill and put pressure on corporate margins.

The easing in oil prices could therefore provide some relief to Indian equities after a prolonged period of pressure from the Iran conflict.

MARKET HEADING FOR EIGHTH WEEKLY FALL

The Nifty 50 and Sensex have fallen 2.3% and 1.9%, respectively, so far this week and are on course for an eighth consecutive weekly decline.

Indian markets will remain closed on Friday for a local holiday.

The prolonged Iran conflict has pushed crude prices and global bond yields higher, raising concerns about inflation and interest rates and keeping foreign investors cautious towards Indian equities.

US inflation data, however, offered some relief. Consumer price inflation increased less than expected in August, while price pressures in the previous month were also revised lower. This could reduce pressure on the Federal Reserve to raise interest rates again in October.

NIFTY LEVELS TO WATCH

Pabitro Mukherjee, Deputy Vice President-Research at Bajaj Broking, said the Nifty formed an inverted hammer candle on Wednesday, signalling selling pressure around the 22,800 level.

The immediate bias remains down, with 22,400 emerging as a key support level.

A move above 22,810 could trigger a pullback towards 23,000. However, Mukherjee said a meaningful trend reversal would require the index to reclaim the 23,000-23,100 zone.

“With the index continuing to trade near six-month lows and broader market participation remaining weak, the near-term setup remains cautious, warranting a selective approach and close monitoring of the key support levels,” Religare Broking said.

(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)

- Ends