Global Markets Brace for Turbulence: GIFT Nifty Signals Steady Gains Amid Escalating Oil Prices and US Inflation Watch

Global Markets Brace for Turbulence: GIFT Nifty Signals Steady Gains Amid Escalating Oil Prices and US Inflation Watch​

Indian benchmark indices Sensex and Nifty are set for a cautious start, with GIFT Nifty indicating a mildly positive opening despite significant global uncertainties. Investors are keenly awaiting the release of critical US consumer price inflation data due later on Wednesday. This high-stakes wait comes as crude oil prices continue to rise amidst escalating geopolitical tensions.

Domestic Market Outlook and Recent Performance​

The domestic market aims for a recovery after closing lower in the previous session. On Tuesday, Sensex declined 388.19 points, marking a fall of 0.49 percent, finishing at 78,154.25. The Nifty also saw a decline, falling 112.10 points or 0.46 percent to 24,471.70.

However, GIFT Nifty is presently trading at 24,555.5, up 40 points or 0.16 percent as of 7:50 am. This suggests that the Nifty 50 could open above Tuesday's close.

Global Markets React to Geopolitical Instability​

Global investors remain on edge following developments in the Middle East. US stocks concluded lower on Tuesday, as pessimism grew regarding a potential deal aimed at easing tensions and reopening the Strait of Hormuz. Iran’s Supreme National Security Council secretary stated that the Strait would remain closed unless the US changed its behaviour.

The S&P 500 fell 0.32 percent, while the Nasdaq Composite dropped 0.6 percent. The Dow Jones Industrial Average recorded a decline of 0.34 percent. Meanwhile, Asian markets showed mixed movement; MSCI's Asia-Pacific equities gauge advanced 0.4 percent, but Hong Kong’s Hang Seng fell 0.8 percent.

Geopolitical Risk Drives Crude Oil Rally​

Crude oil remains a primary risk factor for Indian equities, with prices extending their recent rally on Wednesday. The market reaction is fueled by fading hopes of a US-Iran peace agreement and concerns over potential supply disruptions following attacks targeting two ships.

Brent crude futures rose 0.81 percent to $89.63 a barrel. Meanwhile, US West Texas Intermediate crude gained 0.85 percent reaching $83.91. Both benchmarks had previously settled more than $1 higher on Tuesday and were at their highest closing levels since July 31.

Institutional Flows Provide Support​

Despite the decline observed in domestic equities during the previous session, institutional flows provided some stability to the market. Foreign institutional investors (FIIs) remained consistent net buyers for a third consecutive session on August 11, investing Indian equities worth Rs 258 crore. Domestic institutional investors (DIIs) were also marginal net buyers, contributing around Rs 25 crore to the market.