Indian equities are poised for a weak start on Friday as a steep overnight fall on Wall Street, concerns over the Bihar election results, and a global risk-off mood combine to dampen sentiment. While exit polls offered mixed signals, traders say any deviation from expected results could spark volatility in the short term.
Adding to the unease, concerns have resurfaced in the United States over whether the wave of investment in artificial intelligence is justified, and whether such spending can translate into tangible profits soon. This sentiment, coupled with a reduced likelihood of US rate cuts in December, dragged US and European markets sharply lower overnight.
The US stock market saw its biggest single-day drop in a month, with technology shares bearing the brunt. Nvidia, Broadcom, Alphabet and Tesla all slid sharply after analysts raised concerns about overvaluation in AI-linked stocks. The Federal Reserve’s interest-rate outlook also turned less dovish following remarks from two governors suggesting limited room for cuts this year.
As a result, the Dow Jones Industrial Average fell 797.6 points, or 1.65%, to close at 47,457.22. The S&P 500 lost 1.66% to finish at 6,737.49, and the Nasdaq Composite dropped 2.29% to 22,870.36. Futures, however, hinted at mild stability early Friday, with the Dow and Nasdaq futures up around 0.1%.
Asian markets opened lower, echoing Wall Street’s decline. Japan’s Nikkei was down 1.45%, weighed by a further 8% slide in SoftBank shares after two sessions of steep losses. Australia’s ASX fell 1.6%, while South Korea’s Kospi dropped 2.3%. Hong Kong and Chinese indices also opened in the red.
In Europe, indices that started Thursday in positive territory turned lower by the close, even as select pharma and luxury stocks such as ALK, Zealand, and Burberry posted small gains.
The combination of foreign weakness and domestic political uncertainty has cast a shadow over Indian markets. Analysts say traders will keep a close watch on Bihar’s election outcome, which could have a bearing on sentiment and short-term positioning.
Nifty futures in GIFT City suggest a weak open, with the index hovering around 25,820. On Thursday, the benchmark Nifty closed marginally higher at 25,879.20, while the Sensex added 12 points to finish at 84,478.67. Despite intraday gains, both indices retreated in the final hour amid profit-taking.
IT, auto, FMCG, defence and media stocks weighed on sentiment, while metals, pharma and realty counters saw gains. Midcap and smallcap indices fell sharply, and overall market breadth remained weak.
Foreign institutional investors were net sellers in the cash market, offloading shares worth ₹383.68 crore, while domestic funds were net buyers of ₹3,091.87 crore.
Analysts believe the market will need a strong close above 26,000 to regain momentum, with support zones seen around 25,775–25,820 and resistance between 25,975–26,025.
Several major firms are set to announce results today, including Tata Motors Passenger Vehicles, Siemens, MRF, Glenmark, Marico, Natco Pharma, Narayana Health, and Oil India.
Among Thursday’s key results, Tata Motors Commercial Vehicles posted a 6% rise in revenue but saw losses widen to ₹867 crore from ₹498 crore a year earlier. Hero MotoCorp’s net profit rose 15.7% on a 15.9% revenue increase, while Apollo Tyres’ profit fell 13.2% despite a 6.1% rise in revenue. Muthoot Finance stood out with a stellar 87.4% jump in net profit and 58.5% growth in revenue.
Gold prices remain volatile even after the US government ended its brief shutdown. Dimming hopes of a December rate cut spurred profit-taking in bullion. Spot gold surged to $4,245.60 an ounce before sliding to $4,172.30 by the close, then recovered slightly to around $4,190 in Asian trade.
In Kerala, 22-carat gold prices rose twice on Thursday by a combined ₹2,280, taking the sovereign rate to ₹94,320. Silver moved in tandem, closing at $52.21 after a brief spike to $54.39.
Crude oil prices advanced as well, supported by supply concerns and a weaker dollar. Brent crude gained about 2.5% early Friday to trade above $64.50 a barrel, while WTI hovered near $60.3.
The dollar index eased to around 99.2 after fluctuating between 99.59 and 98.99. The euro strengthened to $1.1632, the pound to $1.314, and the yen appreciated to 154.63 per dollar. The rupee ended Thursday four paise lower at ₹88.67 against the dollar, with the RBI intervening to stem volatility.
Base metals maintained their upward momentum. Copper rose 1% to $10,942 per tonne on supply concerns, while aluminium, zinc, and nickel also edged higher. Rubber futures gained 0.9%, while cocoa and coffee declined.
Cryptocurrencies mirrored equity weakness. Bitcoin briefly fell to $98,072 before recovering to just above $99,250. Ether held near $3,205, while Solana dropped to $144. Analysts expect further volatility as risk sentiment remains fragile across asset classes.