GIFT NIFTY futures hint a positive opening on October 12; key things to know before stock market opens

Equity market indices are set to witness a gap-up opening on Monday, October 12, as investors focus on the Q2 earnings season along with the pullback in crude oil prices after the recent flare-up, while maintaining caution about US Treasury yields rates, an elevated US dollar and foreign outflows.

During the morning hours on Monday, the GIFT NIFTY futures were trading 0.17% higher at 22,625.50 points as of 7:53 am (IST), indicating a positive open for the benchmark indices, which ended higher last week.

NSE data showed that the NIFTY50 index ended 1.3% higher after a recovery rally during the final trading session last week, closing at 22,520.45 points on October 9, in comparison to 22,231.80 points at the previous market close.

The BSE SENSEX index closed 1.23% higher at 72,472.33 points after the trading session on Friday last week, in comparison to 71,593.24 points at the previous equity market close, as per the exchange data.

The benchmark indices recorded a healthy recovery on Friday last week after a massive selloff on Thursday’s market, which was triggered by global crude oil prices hitting $105 per barrel amid attacks in West Asia and fears of another supply chain disruption.

Despite the massive selloff on Thursday, IT stocks bucked the trend last week against the backdrop of TCS’s healthy Q2 results. With IT major HCL Tech set to announce its Q2 results on October 12, investors are set to monitor the financial performance of sectoral heavyweights amid geopolitical volatility.

On Monday, equity investors are also expected to continue focusing on global energy prices along with an elevated US dollar rate, the constant selling pressure from foreign investors, and heightened demand for fixed income assets amid the mixed momentum cues from the Asian markets.

Key things to know before market open

Asian markets today

The equity market indices in Asia were trading on a mixed note on Monday, October 12, with the majority of indices trading in the green apart from South Korea’s KOSPI, where investors exercised selling pressure in semiconductor heavyweight stocks.

MarketWatch data showed that Japan’s Nikkei 225 was closed for the Sports Day holiday in the country; Hong Kong’s Hang Seng was up 0.69%, China’s Shanghai Composite was up 0.20%, Singapore’s FTSE was up 0.45% on Monday’s morning market.

Meanwhile, the KOSPI was down 1.93% as of the early hours on the stock exchange.

FII selling

NSE data showed that although the benchmark indices ended in the green on Friday last week, the foreign institutional investors (FIIs) maintained their selling pressure, shedding ₹3,568.90 crore worth of capital market assets in a single day.

While FIIs sold their share, domestic institutional investors continued their buying streak, purchasing ₹4,743.26 crore worth of assets from across the equity exchanges on October 9.

Elevated treasury yields

The US Treasury yields remained elevated at 5.24% as of 5:01 pm (ET) as fixed income investors focused on the comments about further rate hike potential from the US Federal Reserve in the upcoming period.

Last week on Thursday, Governor Christopher Waller said that more rate hikes for the US economy are needed to push inflation down. However, he also added that the rates do not need to rise on an immediate basis.

With the continued geopolitical pressure in the market, investors remained on edge, powering the demand for safe-haven bets while treading cautiously into emerging markets and riskier investments.

Crude oil at $103/barrel

Global crude oil prices were trading at around $103 per barrel (bbl) during the morning market hours on Monday, October 12, as investors focused on the latest attacks in West Asia amid no signs of a near-term peace deal between the United States and Iran.

Investing.com data showed that Brent crude oil prices surged to their intraday high of $105.63 per bbl during the early market hours before retreating marginally during the morning trade, in comparison to $104.42 per bbl at the previous commodity market close.

Regional media reports suggest that a missile strike was reported at Saudi Arabia’s Riyadh International Airport, followed by a second air strike killing at least 12 people, including foreign nationals, while injuring more than 300 people.

However, Saudi’s energy minister Prince Abdulaziz bin Salman Al Saud said that the country has demonstrated its ability to ensure reliable energy supplies and will keep investing and preparing to meet a range of challenges.

How did US markets end last week?

The US equity indices ended in the green last week as Wall Street recovered from a temporary sell-off in tech stocks on Friday’s market. The easing energy costs combined with the marginal easing of the Treasury yields added to investors' sentiment in US equities.

MarketWatch data showed that the Dow Jones Industrial Average ended 0.83% higher at 51,654.95 points after the trading session on Friday, in comparison to 51,231.64 points at the previous equity market close.

The S&P 500 index closed 0.59% higher at 7,811.54 points after the session on October 9, compared to 7,765.36 points at the previous market close, as per the exchange data.

The tech-heavy Nasdaq 100 index ended 0.51% higher at 30,883.15 points after Friday’s market session, in comparison to 30,725.81 points at the previous Wall Street close.