GIFT Nifty flat, signals muted start for Sensex, Nifty; Brent above $101, Asian selloff weigh on sentiment

New business data points to the fact that Indian key market indices The two key benchmark indices are likely to open on a wary note on Thursday, with GIFT Nifty pointing to a largely flat start after the Nifty declined to a three-month low in the previous session. Brent crude above $101 a barrel, escalating Middle East tensions, rising US Treasury yields and losses across Asian and US equities are likely to keep sentiment under pressure. Market participants additionally await crucial US inflation data for clues on the The US central bank's policy path.

GIFT Nifty was trading at 23,489 around 8 am, almost unchanged from its previous day’s close. Indian equities extended their slide on Wednesday as selling intensified across most sectors, particularly IT and realty. The Sensex tumbled 813.35 points, or 1.08 percent, to 74,764.23, while the Nifty declined 203.60 points, or 0.86 percent, to 23,431.50, its lowest level in three months.

Asian markets decline as Middle East conflict intensifies

Asian equities declined on Thursday. A fresh wave of attacks on shipping in the Middle East heightened concerns over the security of energy supplies, thereby pushing crude above the psychologically important $100 level and raising fresh concerns over inflation and interest rates. MSCI's broadest index of Asia-Pacific shares outside Japan declined 1 percent, while Japan's Nikkei and South Korea's Kospi both eased more than 1 percent. The regional losses follow declines on Wall Street.

Share Markets Live Updates | Sensex, Nifty, GIFT Nifty Today

Brent tops $101 as oil surge intensifies

Oil stays the biggest immediate macroeconomic concern for Indian equities. Brent crude advanced as high as $101.94 a barrel on Thursday after breaking through $100 in the previous session for the first time since July. Brent for November settlement was subsequently trading at $101.33, while West Texas Intermediate advanced 0.5 percent to $96.56 a barrel.

Ponmudi R, CEO of Enrich Money, stated elevated energy prices and firming bond yields are weighing on risk appetite, presenting a difficult combination for emerging-market equities. The WTI around $96-97 and Brent above $101 are reinforcing inflation concerns and contributing to upward pressure on US Treasury yields.

Geopolitical uncertainty additionally stays high. US President Donald Trump has stated the conflict with Iran could end "immediately" after the midterm elections, but Ponmudi stated the lack of clarity over the path towards de-escalation is keeping market participants wary and the geopolitical risk premium embedded in energy prices.

Wall Street falls as oil, Treasury yields climb

US stocks closed softer on Wednesday. The Dow Jones Industrial Average declined 0.77 percent to 52,381.02, while the S&P 500 declined 0.48 percent to 7,636.46. The Nasdaq eased 0.64 percent to 26,253.34. The markets are already debating whether the The US central bank will tighten policy further. Fed funds futures traders are at present pricing in around a 60 percent probability of a US interest-rate gain the week ahead.

Ponmudi sees 23,550-23,600 as the Nifty's immediate resistance, with a sustained move above 23,600 potentially opening a recovery towards 23,800. On the downside, a break below 23,400 could extend the slide towards 23,200.

Foreign institutional market participants (FIIs) remained net sellers for a second consecutive session on Wednesday, offloading Indian equities worth Rs 582 crore. Domestic institutional market participants (DIIs), that stated, continued to provide backing, purchasing equities worth Rs 1,509 crore. That extended their buying streak to a 22nd consecutive session.