Asian weakness may drag domestic stocks

GIFT Nifty:

The GIFT Nifty December futures contract is trading 3 points lower, indicating a flat opening for the Nifty 50.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 11,756.25 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 8,718.30 crore in the Indian equity market on 28 November 2024, provisional data showed.

According to NSDL data, FPIs have sold shares worth over Rs 30738.53 crore (so far) in the secondary market during November 2024. This follows their sale of shares worth Rs 1,13,858.81 crore in October 2024.

Global Markets:

The Dow Jones index futures were up 125 points, signaling a strong opening for U.S. stocks today.

Asian shares fell on Friday as the yen strengthened due to expectations of a Bank of Japan rate hike following strong inflation data. Geopolitical tensions worsened with Russia's warning to strike Kyiv with new ballistic missiles, following its attack on the power system in Ukraine.

Tokyo's Core CPI inflation, which excludes volatile fresh food items, rose 2.2% year-on-year in November, government data showed on Friday. Headline CPI inflation surged 2.6% from 1.8% in the prior month. The BOJ is expected to raise interest rates in December after two historic hikes earlier this year.

Overnight, trading in U.S. equities and Treasuries was closed due to the Thanksgiving holiday.

Domestic Market:

The domestic equity benchmarks plummeted on Thursday, mirroring a mixed trend in global markets. The benchmark Nifty index crashed below the 23,920 level, primarily driven by a sharp decline in IT and auto stocks. IT stocks tanked amid concerns over potential policy shifts under the incoming US administration and uncertainty surrounding the future trajectory of US interest rates. A stronger US dollar further eroded investor sentiment. Additionally, aggressive profit-booking ahead of the month-end derivative expiry accelerated the market's downward spiral.

The S&P BSE Sensex tumbled 1,190.34 points or 1.48% to 79,043.74. The Nifty 50 index dropped 360.75 points or 1.49% to 23,914.15.

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