Escalating tensions in West Asia continue to keep global investors on edge as US air strikes and Iranian retaliation raise fears of a wider regional conflict. Despite the geopolitical uncertainty, Brent crude remains below the $86-a-barrel mark, offering some relief to energy-importing economies.
Meanwhile, a fresh sell-off in global semiconductor stocks dragged Asian equities lower for a second straight session after heavy losses on Wall Street. Indian markets are also expected to remain cautious amid weak global cues, a weakening rupee and persistent foreign fund outflows.
Gift Nifty, which closed at 24,171.50 on Thursday night, slipped to around 24,104 in early trade before recovering slightly, indicating a mildly positive opening for Indian equities.
India's southwest monsoon rainfall deficit widened to 23.9 percent as of July 16.
Kerala's rainfall deficit increased to 33 percent.
Uttar Pradesh, Bihar, Punjab, Jharkhand, Gujarat, Karnataka, Telangana and Andhra Pradesh have recorded rainfall deficits exceeding 20 percent.
More than half of India's geographical area is currently experiencing rainfall shortfalls above 20 percent.
A sharp decline in semiconductor shares once again weighed on US markets.
Shares of Micron, Intel and SanDisk fell between 5.5 percent and 13.5 percent after weaker-than-expected sales forecasts.
SK Hynix ADR has lost nearly 22 percent over the past two sessions.
Alphabet declined 4.5 percent following reports that Gemini 3.5 Pro could face a prolonged delay.
SpaceX postponed its Starship launch at the last minute, adding to negative sentiment in technology stocks.
On Thursday:
Dow Jones fell 105.67 points (0.20 percent) to 52,552.97.
S&P 500 declined 38.63 points (0.51 percent) to 7,533.77.
Nasdaq Composite dropped 387.28 points (1.47 percent) to 25,881.95.
US futures continued to trade lower on Friday morning, with Dow, S&P 500 and Nasdaq futures all extending losses.
Indian companies listed in New York ended mixed.
HDFC Bank, ICICI Bank, Infosys and Wipro all erased intraday gains during after-hours trading and closed lower.
European markets ended on a mixed note.
German and French indices declined.
UK and pan-European benchmarks closed higher.
Asian markets remained under heavy selling pressure.
South Korea's Kospi plunged around 7 percent.
SK Hynix dropped about 12 percent.
SoftBank fell nearly 8 percent as semiconductor-related stocks weakened.
Japan's Nikkei lost about 3.5 percent.
Taiwan's benchmark fell around 4 percent.
Australia's market declined about 0.7 percent.
Shanghai traded lower, while Hong Kong managed modest gains.
Indian equities displayed sharp intraday volatility on Thursday before ending almost flat.
Weakness was visible across banking, financials, metals, real estate, capital market and tourism stocks, while IT, automobiles and consumer durables provided some support.
Key concerns for investors include:
Rising geopolitical tensions.
Weakening rupee.
Continued foreign institutional selling.
Foreign portfolio investors sold equities worth ₹4,205.56 crore, while domestic institutional investors bought shares worth ₹2,986.41 crore.
Market breadth remained negative across both exchanges.
Corporate highlights included:
Kalyan Jewellers paused after six consecutive sessions of gains, having added nearly ₹20,000 crore in market capitalisation during the rally.
ICICI Lombard declined more than 10 percent after first-quarter profit dropped 46 percent due to higher provisioning for motor insurance claims following a Supreme Court ruling.
Dixon Technologies, Kaynes Technology, Amber Enterprises and PG Electroplast gained after the government announced fresh incentives for electronics and mobile manufacturing.
Major earnings updates include:
Jio Financial Services reported a 156 percent jump in June-quarter net profit to ₹830 crore.
Tech Mahindra posted 6.6 percent constant-currency revenue growth, with net profit rising 31.6 percent and new deal wins crossing $1 billion.
Wipro reported a 1.2 percent decline in constant-currency revenue, while net profit fell 4.7 percent amid margin pressure.
CEAT's June-quarter net profit plunged 96.4 percent.
Borosil Renewables swung from a loss of ₹166.5 crore to a net profit of ₹86.8 crore.
Piramal Finance reported a 67 percent increase in quarterly net profit to ₹461 crore.
Gold prices came under pressure despite the worsening geopolitical situation.
Markets are increasingly worried that higher crude oil prices could keep inflation elevated, forcing central banks to maintain higher interest rates.
Spot gold fell more than 2 percent on Thursday, closing at $3,977.20 an ounce after touching an intraday low of $3,969.
Prices recovered slightly to around $3,995 on Friday morning.
In Kerala, 22-carat gold declined by ₹200 to ₹1,05,080 per sovereign, with further weakness possible.
Silver fell nearly 4 percent to $55.64 an ounce.
Platinum traded around $1,605, palladium at $1,228 and rhodium at $7,875.
Industrial metals rebounded after Wednesday's decline.
Copper rose 0.2 percent to $13,563.35 a tonne.
Aluminium gained 0.51 percent.
Zinc, tin, nickel and lead also advanced.
International rubber prices eased slightly, but domestic prices continued to rise because of the weaker rupee.
Kerala's RSS-4 rubber touched a record ₹28,200 per quintal.
Soft commodities remained under pressure.
Cocoa dropped 7.51 percent to $5,441 a tonne amid signs of weaker European demand.
Arabica coffee declined 3.92 percent to $3.14 per pound despite concerns over lower Brazilian production.
The US Dollar Index closed at 100.76 and eased slightly in early Friday trade.
The Indian rupee weakened for another session, closing nine paise lower at ₹96.35 against the US dollar. Limited response to FCNR(B) deposit measures and sustained foreign outflows continued to pressure the currency.
Brent crude closed at $84.23 a barrel on Thursday before recovering to around $85.34 in early Friday trade. WTI crude traded near $80.
Digital assets remained weak.
Bitcoin traded around $63,750.
Ether hovered near $1,860.
Solana traded around $75.40.
Sensex: 77,186.87 (+0.00%)
Nifty 50: 24,072.75 (-0.02%)
Bank Nifty: 57,582.25 (-0.30%)
Nifty Midcap 100: 62,686.75 (-0.41%)
Nifty Smallcap 100: 19,336.25 (-0.10%)
Dow Jones: 52,552.97 (-0.20%)
S&P 500: 7,533.77 (-0.51%)
Nasdaq Composite: 25,881.95 (-1.47%)
US dollar: ₹96.35 (+₹0.09)
Gold (spot): $3,977.20 (-$84.20)
Gold (Kerala, per sovereign): ₹1,05,080 (-₹200)
Brent crude: $84.23 (-$0.72)