GIFT Nifty signals cautious start for Sensex, Nifty; Asian weakness, AI selloff weigh despite softer oil
GIFT Nifty was trading with marginal gains on Monday morning, signalling a cautiously positive start for Indian benchmark equity indices Sensex and Nifty. A decline in crude oil prices and a rebound in US equity futures may provide some support, but weakness across Asian markets could weigh on sentiment.
Indian benchmark indices Sensex and Nifty are likely to open on a cautiously positive note on Monday, with GIFT Nifty signalling a flat-to-positive start after two consecutive sessions of gains. Weakness across Asian markets, a sharp selloff in US technology stocks and concerns over artificial intelligence investment could weigh on sentiment. However, a decline in crude oil prices and a rebound in US equity futures may provide some support.
GIFT Nifty was trading at 23,130 around 7:45 am, up 35 points, or 0.15 percent. Indian equities ended higher on Friday, with the Sensex gaining 413.66 points, or 0.56 percent, to 74,729.27 and the Nifty advancing 148.80 points, or 0.65 percent, to 23,146.15. Foreign institutional investors turned net buyers after 15 consecutive sessions of selling, purchasing equities worth around Rs 1,166 crore. Domestic institutions snapped their 45-session buying streak, selling shares worth Rs 3,661 crore.
Asian equities traded lower on Monday, although they recovered some of their early losses, as concerns over the enormous funding requirements for artificial intelligence investments weighed on technology stocks ahead of a busy earnings week. MSCI's broadest gauge of Asian equities declined 0.5 percent, while South Korea's Kospi recovered from an opening fall to gain 0.2 percent. Japan's Nikkei 225 futures slipped 1.3 percent, Hong Kong's Hang Seng futures declined 0.2 percent, and the Shanghai Composite fell 0.2 percent.
US equity futures rebounded after Friday's technology-led selloff, with S&P 500 futures rising 0.5 percent and Nasdaq 100 futures gaining 1 percent. The recovery in US futures and easing oil prices helped limit losses across Asian markets. US equities ended sharply lower on Friday as renewed selling in artificial intelligence-related technology stocks and a jump in crude oil prices weighed on investor sentiment.
The Nasdaq Composite plunged 2.19 percent to 26,128.13, recording the steepest decline among the major indices. The S&P 500 fell 1.22 percent to 7,649.71, while the Dow Jones Industrial Average slipped 0.55 percent to 51,891.77. Concerns over the scale of investment required to support artificial intelligence development continued to weigh on technology stocks, with investors turning their attention towards upcoming earnings reports for greater clarity.
Crude oil prices declined on Monday from a five-month high as traders weighed renewed Middle East hostilities against signs that regional supplies were holding near pre-war levels. Oil prices also reacted to US President Donald Trump's decision to waive some sanctions on Russia, although he subsequently said a final decision on the matter had not been made. Brent crude fell 1.5 percent to $108.27 a barrel, while West Texas Intermediate declined 0.6 percent to $100.83 a barrel.
Despite Monday's decline, crude prices remained elevated, with geopolitical tensions continuing to influence the outlook. Ponmudi R, CEO of Enrich Money, said persistently elevated crude oil prices and geopolitical uncertainty are keeping macroeconomic risks in focus for Indian equities. He said progress towards a diplomatic resolution of the Middle East conflict could ease crude prices and support market sentiment, while further escalation or prolonged disruption to energy shipments could intensify volatility across global markets.
