GIFT Nifty down, signals weak start for Sensex, Nifty after 1,100-point rally; rising oil, US inflation weighs

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Indian benchmark indices Sensex and Nifty are likely to open weak on Wednesday, with GIFT Nifty trading down after Tuesday's sharp rally. A rebound in Asian technology stocks and improving domestic corporate earnings could support sentiment, but rising crude oil prices, persistent FII selling and caution ahead of US inflation data may limit gains.

GIFT Nifty was trading at 22,761 around 8 am, down 90 points, or 0.4 percent. Indian equities surged in the previous session, with the Sensex jumping 1,109.10 points, or 1.54 percent, to 73,033.78 and the Nifty gaining 358.60 points, or 1.60 percent, to 22,721.95. FIIs sold equities worth around Rs 1,300 crore for a 13th consecutive session, while domestic institutions bought shares worth more than Rs 2,439 crore.

Indian equities staged a strong recovery on Tuesday, led by IT stocks, with gains accelerating in the final hour after Finance Minister Nirmala Sitharaman's positive comments on long-term capital gains (LTCG) tax and securities transaction tax (STT) lifted investor sentiment.

Share Markets Live Updates | Sensex, Nifty, GIFT Nifty Today

Asian markets rebound ahead of US inflation data

Asian equities edged higher on Wednesday as artificial intelligence-related stocks recovered from recent losses, although elevated crude oil prices and caution ahead of US inflation data tempered gains. Investors are awaiting US inflation figures later in the day for fresh clues on the Federal Reserve's interest-rate outlook.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5 percent, while Japan's Nikkei gained 0.2 percent. South Korea's Kospi advanced 1.8 percent, leading the regional gains. US equity futures were largely unchanged, with S&P 500 e-minis marginally higher at 7,858.8.

Wall Street slips as chip stocks extend losses

US equities ended slightly lower on Tuesday as semiconductor stocks extended their recent decline, weighing on the technology-heavy Nasdaq. The weakness in chip stocks contrasted with the rebound in Asian technology shares on Wednesday, while investors remained cautious ahead of the US inflation reading.

The S&P 500 slipped 0.02 percent to 7,805.45, while the Nasdaq Composite declined 0.15 percent to 27,204.38. The Dow Jones Industrial Average fell 0.35 percent to 51,670.10.

Brent climbs towards $107 amid Middle East tensions

Crude oil prices rose on Wednesday as renewed attacks on Saudi Arabia intensified concerns over energy supplies from the Middle East. The increase followed missile and drone attacks by Yemen's Houthis on Saudi Arabia, adding to supply concerns amid the ongoing Middle East conflict.

Brent crude gained 1.2 percent to $106.86 a barrel, while West Texas Intermediate rose 1.2 percent to $95.25 a barrel.

Earnings recovery offers support, but oil remains a risk

Ponmudi R, CEO of Enrich Money, said improving corporate earnings and recent strength in IT stocks are providing some support to Indian equities, although rising crude prices amid escalating Middle East tensions remain a significant concern.

He said the ongoing earnings season would remain an important driver of sector-specific buying as investors assess revenue growth, margins and management commentary. According to Ponmudi, the sustainability of the broader market recovery will depend on whether earnings strength can offset persistent macroeconomic headwinds.