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Indian stocks set for pullback after sharp rally on oil slide, foreign inflows

By · Published by Everything Blog

In short

GIFT Nifty futures signaled a weaker opening on Friday after the Nifty 50 and BSE Sensex jumped more than 2% in the previous session. The prior advance was bolstered by foreign institutional investors purchasing approximately 150 billion rupees ($1.6 billion) in equities, marking their largest single-day net acquisition in almost six years. Meanwhile, domestic market participants are navigating a wave of quarterly corporate earnings that included forecast beats from consumer firms Titan and Britannia alongside an earnings miss from Bharti Airtel.

Key points

  • Limited direct exposure to global artificial intelligence hardware trade may protect Indi…: Limited direct exposure to global artificial intelligence hardware trade may protect Indian equities from severe international selloffs.
  • Lower crude oil prices continue to provide a crucial domestic buffer against broader cros…: Lower crude oil prices continue to provide a crucial domestic buffer against broader cross-border market volatility.
  • Domestic corporate earnings are showing mixed momentum across major consumer, energy, ins…: Domestic corporate earnings are showing mixed momentum across major consumer, energy, insurance, and telecommunications firms.

Sources checked by our analysis pipeline: 1

Both the Nifty 50 and the BSE Sensex have gained for six sessions in a row, culminating in their best session in seven months on Thursday, aided by lower oil prices and strong foreign fund inflows.

Foreign institutional investors bought stocks worth about 150 billion rupees ($1.6 billion), their biggest single-day net purchase in nearly six years, as investors rotated out of AI-linked trades globally.

GIFT Nifty futures were at 24,460 as of 7:49 a.m. IST, indicating a weaker start for the benchmark Nifty 50, which closed at 24,536.6 on Thursday.

"The indicated decline is relatively contained compared with the severe global selloff, suggesting that lower crude and India's limited direct exposure to the AI-hardware trade are providing some insulation," said Hariselvan Radhakrishnan, founder and CEO of HST Wealth.

Domestic markets are likely to face a volatile session with the possibility of consolidation and profit-booking following the benchmarks' winning streak, according to two analysts.

The Nifty 50 and the BSE Sensex rose 2.4% and 2.6%, respectively, on Thursday after Brent crude fell below $100 a barrel, with investors betting the…

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