GIFT NIFTY futures indicate gap-up opening on November 5; what investors should know before stock market opens

Equity market indices, NIFTY50 and SENSEX, are expected to witness a gap-up opening on Thursday, November 5, as investors focus on the sharp pullback in crude oil prices and US Treasury yields, major FII buying support, and improving sentiment about the West Asia conflict after the US midterm election results.

As of 7:50 am (IST), the GIFT NIFTY futures were trading 0.36% lower at 24,286 points ahead of the opening bell, indicating that the benchmark indices are likely to witness a strong opening when compared to the previous close.

The data showed that GIFT NIFTY futures indicate a potential for a 326-point surge during the trading session from previous market close levels.

After Wednesday’s market session, the NIFTY50 index ended 0.63% or 149 points higher at 23,960.60, in comparison to 23,810.85 points at the previous equity market close, according to NSE data.

The BSE SENSEX index closed 0.50% or 383.55 points higher at the 77,301.40 level after the trading session on November 4, compared with 76,917.85 points at the previous stock market close, as per the exchange data.

Key things to watch before market opens

FIIs’ power ₹7,284 crore inflows

NSE data showed that Foreign institutional investors (FIIs) purchased around ₹7,284.03 crore worth of capital market assets in a single day, during the trading session on Wednesday, November 4, in turn supporting the benchmark indices in the green territory.

While FIIs maintained their buying support, domestic institutional investors sold ₹3,712.23 crore worth of capital market assets across the exchanges during the session booking profits amid the overall market rally.

Asian equities trade on mixed note

The benchmark equity market indices in Asia were trading on a mixed note during the morning market hours on Thursday, November 5, as investors focused on the subdued sentiment for AI and chipmaking stocks after the US midterm election results and the multi-day sell-off pressure in the market.

Japan’s Nikkei 225 was down 0.38%, the Shanghai Composite was down 0.14%, and KOSPI tumbled 4.5% as of the morning market hours, India time. In contrast, the Hang Seng was trading 2.5% higher, as investors await the opening of India and Singapore markets.

Treasury yield pullback

While investors exited equities in Asia, the overall demand for safe-haven assets in the market powered the price of gold and US Treasuries. With price and yields having an inverse relationship, the benchmark US 10-year Treasury yields declined on Wednesday evening, US time.

Data showed that the US 10-year Treasury yields declined to 4.84% on Wednesday’s market (EST), in comparison to 4.89% as investors powered demand amid a tech stock rout.

Gold prices rallied for a second consecutive day on Thursday, November 5, with COMEX gold trading 1.6% higher at $4,139.60 per ounce levels.

Oil cools to $96/bbl

Due to the overall improved sentiment in the market, crude oil prices also contracted sharply to near $96 per barrel levels during the morning hours on Thursday, November 5, as investors eye a potential near-term end to the escalations in West Asia.

TradingView data showed that the Brent crude oil prices were trading at $96.9 per bbl during the morning market hours on Thursday, in comparison to $98 per bbl at the previous commodity market session.

The January futures of Brent were down 1% at $93.6 per bbl as of 7:41 am (IST), compared to $94.62 per bbl at the previous market close.

Energy prices have declined sharply in the last few trading sessions, trading 18.5% lower on a last five-session basis, and 6.6% lower on a one-month basis. However, crude oil prices remain nearly 18% elevated in the last three months.

The latest media report from Al Jazeera showed that Iran has proposed a seven-day roadmap to end the West Asia conflict, while lauding the loss of Republicans at the US midterm elections.

Wall Street recap

US equities rallied during the trading session on Wednesday, November 4, as investors were looking beyond the initial uncertainty into the potential for overall benefit to the US economy with the Democrats bagging the midterm election win.

While the Democratic Party taking control of the House of Representatives and the Senate is concerning for tech, AI and chipmaking stocks due to the crackdown potential on their spending, other sectors like consumer, retail, and financial services look towards upside potential.

Data showed that the Dow Jones Industrial Average rallied to end 3.03% higher at 53,356.12 points as of the stock market close on Wednesday, in comparison to 51,786.72 points at the previous equity market close.

The S&P 500 index surged to close 1.58% higher at 7,688.62 points after Wednesday’s trading session, compared to 7,568.91 points at the previous US stock market close, according to data collected from the MarketWatch website.

While the tech-heavy Nasdaq 100 also witnessed some intraday volatility and a rally, the index ended with modest gains, up 0.91% to close at 28,437.17 points on November 4, in contrast to 28,180.26 points at the previous Wall Street session.