GIFT Nifty signals cautious start for Sensex, Nifty; Asian markets rebound but US yields, FII selling…

As per the latest business developments, Indian key market indices The two key benchmark indices are likely to open on a wary note on Wednesday, with GIFT Nifty indicating a muted start with a marginal decline. A rebound in Asian equities and some easing of concerns over crude supplies are offset by elevated US Treasury yields and persistent foreign institutional selling. Market participants will additionally stay guarded ahead of crucial US inflation data that could influence the The US central bank's interest-rate trajectory.

GIFT Nifty's October series was trading at 22,805 around 8 am, down 25 points, or 0.11 percent, after Indian equities ended softer in a volatile F&O expiry session on Tuesday. Uncertainty over prospects for a US-Iran peace agreement, persistent FII selling, a weaker indian rupee and elevated crude prices and bond yields kept market participants wary. The Sensex declined 242.65 points, or 0.33 percent, to 72,529.07, while the Nifty declined 64.05 points, or 0.28 percent, to 22,716.20.

Global cues improved somewhat in Asian trade, with regional equities rebounding and US stock-index futures edging elevated. Oil, another major concern for Indian markets, remained above $100 a barrel but well below recent highs after signs of improving Middle East supply flows.

That stated, the domestic backdrop stays fragile. FIIs sold nearly Rs 10,000 crore of Indian equities in the previous session, while a weakening indian rupee, high crude prices and elevated US yields keep pose risks. Domestic institutions absorbed a significant portion of the selling, purchasing equities worth nearly Rs 7,000 crore.

Ponmudi R, CEO of Enrich Money, stated persistent foreign selling alongside elevated US Treasury yields could keep limit the durability of any recovery in Indian equities.

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Asian stocks rebound ahead of US inflation data

Asian equities advanced on Wednesday for the first time in three sessions as some easing of concerns surrounding oil supplies helped stabilise sentiment after the recent bond-market selloff. The MSCI Asia Pacific Index advanced 0.8 percent, led by technology shares after semiconductor stocks advanced in the US overnight.

Japan's Topix rose 0.6 percent, while the Shanghai Composite advanced 0.4 percent. Hong Kong's Hang Seng bucked the regional trend, falling 0.4 percent. US equity futures were additionally mildly positive, with S&P 500 futures up 0.2 percent in Asian trade.

Investor attention is now turning to upcoming US inflation data, which could provide fresh clues on the Fed's policy path after the recent surge in Treasury yields.

US Treasury yields hit multi-year highs

Wall Street ended slightly softer on Tuesday as the selloff in government bonds continued ahead of key US inflation and labour-market readings. The benchmark 10-year US Treasury yield advanced to 5.293 percent, its highest level since June 2007, while the 30-year yield touched 5.6206 percent, the highest since June 2002.

The Dow Jones Industrial Average declined 131.59 points, or 0.26 percent, to 51,349.92. The S&P 500 eased 0.17 percent to 7,670.84, while the Nasdaq Composite edged 0.08 percent softer to 26,797.54.

Brent rebounds above $103 after Tuesday's decline

Crude prices recovered modestly on Wednesday after declining in the previous session as improving supply flows eased some concerns over disruptions in the Middle East. Brent crude rose 0.9 percent to around $103.50 a barrel, while West Texas Intermediate advanced 0.2 percent to $89.58.

Oil had fallen on Tuesday after Saudi Arabia was noted to have restored around half the capacity of its East-West pipeline following drone attacks. The Trump administration additionally ordered another release of crude from US emergency reserves.

Ponmudi stated signs of recovering crude production and improving supply flows had helped bring prices softer, but cautioned that the geopolitical situation remained fluid, leaving energy markets vulnerable to renewed volatility if tensions escalate or negotiations falter.

Ponmudi sees 22,800 as the immediate resistance for the Nifty, with a sustained move above it potentially supporting a recovery towards 23,000. On the downside, 22,600-22,500 is the crucial backing zone, and a decisive break could expose the index to 22,300.