Indian equity benchmarks are expected to begin Thursday’s session on a subdued note, tracking weak global cues as investors turn cautious following a sharp sell-off in US equities and renewed concerns around an unwinding of the yen carry trade.
Early indicators suggest a muted-to-weak start for domestic markets, with GIFT Nifty pointing to modest downside pressure. Across Asia-Pacific, equities were largely in the red in early trade, led by declines in Japan’s Nikkei index.
Global sentiment has deteriorated amid profit-booking in high-valuation technology and artificial intelligence-linked stocks, alongside growing scepticism over the pace and returns of AI-led capital expenditure. Reports of delayed or scaled-back investments in data-centre infrastructure have further weighed on risk appetite.
Adding to the caution is anticipation ahead of key US inflation data, which investors believe could influence the Federal Reserve’s policy trajectory in the coming months. Uncertainty over interest rate direction has kept volatility elevated across global markets.
On the domestic front, derivatives positioning points to a phase of consolidation. Market participants note stronger call writing at higher strike levels, indicating resistance on the upside, while put writers appear to be shifting positions lower. That said, relatively subdued volatility readings and short-term oversold conditions suggest the possibility of intermittent short-covering rallies during the session.
Market participants are expected to remain selective, with global cues, currency movements, and institutional flows guiding intraday trends.
