Indian benchmark indices are likely to open on a positive note on Wednesday, with the GIFT Nifty trading 0.26 per cent higher in early indications despite continued weakness across major Asian markets.
The upbeat signal comes after a sharp sell-off in the previous session, when investors reacted nervously to rising geopolitical tensions, surging oil prices and concerns over global inflation.
Asian Markets Extend Decline
Asian equities fell for a second consecutive session on Wednesday as stronger-than-expected US inflation data strengthened expectations that the US Federal Reserve could keep interest rates elevated for longer or even consider another rate hike next year.
The MSCI Asia Pacific Index slipped 0.5 per cent, led by weakness in South Korea, where the Kospi index plunged 2.8 per cent.
The decline also followed a pause in the global semiconductor rally, which had recently pushed technology stocks to record highs across several markets.
Oil Prices Remain Elevated
Crude oil prices continued to stay near multi-month highs amid ongoing tensions in the Middle East and fears of prolonged supply disruptions.
Brent crude was trading close to $107 per barrel, while West Texas Intermediate hovered around $102 per barrel after both benchmarks surged nearly 4 per cent in the previous session.
The sustained rise in oil prices has added to inflation concerns globally and weighed heavily on investor sentiment.
Indian Markets Saw Sharp Sell-Off
Indian equity benchmarks witnessed their steepest single-day decline since March 30 in the previous trading session.
The NSE Nifty 50 ended 1.49 per cent lower at 23,815.85, while the BSE Sensex dropped 1.70 per cent to close at 76,015.28.
The broad market weakness wiped out nearly Rs 6.4 lakh crore in investor wealth during the session.
Heavy selling pressure was seen across sectors as investors reacted to geopolitical uncertainty, elevated crude prices and weakness in global markets.
Key Q4 Earnings To Watch
Market participants will also closely track a packed earnings calendar on Wednesday, with several major companies set to announce their fourth-quarter results.
Among the key firms expected to report earnings are Bharti Airtel, Cipla, DLF, Hindustan Petroleum Corporation, Tata Motors, TVS Motor Company, Power Finance Corporation and Oil India.
Other companies scheduled to release results include Balaji Amines, Bharti Hexacom, Crompton Greaves Consumer Electricals, Kaynes Technology India, LIC Housing Finance, Metropolis Healthcare and Paras Defence and Space Technologies.
Investors To Track Global Signals
Analysts believe market direction in the near term will continue to depend heavily on global cues, particularly developments in the Middle East, crude oil prices, US inflation data and commentary from the Federal Reserve.
Any further escalation in geopolitical tensions or rise in commodity prices could keep volatility elevated in equity markets.