Nifty Holds Steady, Sensex Signals Cautious Start Amid Elevated Crude Prices and Weak Global Market Sentiment

Indian Equity Markets Expected to Open Cautiously on Wednesday

The Indian equity markets are likely to open on a cautious note on Wednesday, with the GIFT Nifty trading around 23,434 in early trade, up just 11 points or 0.05 percent. This muted start for benchmark indices Sensex and Nifty comes after the sharp selloff seen in the previous session.

The subdued indication is attributed to persistent concerns over elevated crude oil prices, fading hopes of a breakthrough in US-Iran negotiations, continued foreign fund outflows, and weak global market cues. The benchmark indices had ended sharply lower on Tuesday, extending their losing streak to a third consecutive session. The Sensex plunged 1,456 points to close at 74,559, while the Nifty slipped 436 points to settle at 23,380, dragged lower by broad-based selling in IT stocks, financial heavyweights, and rate-sensitive sectors.

Global Market Cues Weigh on Indian Equities

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Wall Street indices ended lower after hotter-than-expected US inflation data raised concerns that the Federal Reserve may have to keep rates elevated for longer. The Nasdaq Composite fell 0.71 percent to 26,088.20, while the S&P 500 declined 0.16 percent to 7,400.96. The Dow Jones Industrial Average, however, managed to edge 0.11 percent higher.

US consumer inflation rose 3.8 percent in April, above market expectations of 3.7 percent, reinforcing fears of sticky inflation and reducing expectations of an early Fed rate cut cycle.

Asian Markets Trade Lower, Oil Prices Remain Elevated

Asian markets also traded lower on Wednesday morning. MSCI's broadest index of Asia-Pacific shares outside Japan declined 0.6 percent, while South Korean equities fell sharply in early trade before recovering some losses. Japan's Nikkei 225 slipped 0.2 percent, while S&P 500 futures were marginally lower.

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Crude oil prices eased slightly on Wednesday after rising for three consecutive sessions, but remained firmly above the $100 per barrel mark. Brent crude futures were trading near $107 a barrel, while US WTI crude hovered above $101 per barrel.

Domestic Developments and Market Sentiment

Investors also remained cautious ahead of US President Donald Trump's upcoming meeting with Chinese President Xi Jinping later this week, while tensions in the Middle East continued to cloud global sentiment.

In another key domestic development, the government raised import duties on several categories of gold, silver, and other precious metal imports to 15 percent from 6 percent, according to a finance ministry notification issued on Wednesday.

Foreign institutional investors continued to remain net sellers on Tuesday, offloading equities worth Rs 1,959 crore. Domestic institutional investors, however, remained supportive and bought shares worth Rs 7,990 crore.

Technical Analysis

According to Ponmudi R, CEO of Enrich Money, Indian markets are expected to open cautiously as geopolitical tensions and unfavourable global macroeconomic cues continue to weigh on risk sentiment. He noted that Nifty continues to trade with a negative undertone, with the 23,300-23,150 zone acting as a key support area. A sustained breakdown below this range could accelerate weakness toward 23,000-22,900 levels. For Bank Nifty, he said the 53,200-53,000 zone remains an important support area, while resistance is seen near 53,800-54,000 and then 54,300-54,500.