Sensex, Nifty likely to open lower on weak global cues

Indian stocks are poised for a soft start on Friday, tracking weakness in global peers, after data pointing to a strong labor market in the United States raised concerns about further tightening of monetary policy.

GIFT Nifty shares in India on the NSE International Stock Exchange were down 0.04 percent at 19,480.5, as of 8:14 am.

Indian stocks shrugged off weakness in global stocks on Thursday, with the leading stock indices Nifty 50 and Sensex reaching new highs. Both benchmarks have gained more than 1.6 percent this week so far.

The rally extended to broader markets as well, with small and medium-sized companies hitting 52-week highs and records, respectively.

But the global signals worsened after data showed a rise in private payrolls in the United States, pointing to the strength of the labor market, sparking fears of a prolonged high-interest regime and sparking a rally in bond yields around the world.

The Federal Reserve’s monetary policy minutes on Wednesday showed that most members expect further policy tightening. The odds of a 25 basis point rate hike in July were 92.4 percent, compared to 86 percent on Wednesday.

Stocks on Wall Street closed lower overnight, with the S&P 500 and Dow Jones Industrial Averages posting their biggest one-day declines since May.

Asian markets slumped, with the MSCI Asia index excluding Japan losing more than 1 percent, and the MSCI global all-country price index posting its worst day in more than two months.

Foreign institutional investors bought ₹2,641 crore of Indian shares on a net basis on Thursday, while local investors sold ₹2,352 crore of shares, according to interim NSE data.

According to analysts, the rise in Indian standards over the past few months has been fully supported by foreign inflows.

The Nifty 50 index is up 12.31 percent in FY24 so far. Foreign Portfolio Investors (FPIs) bought shares worth more than ₹1-lakh crores during the period.