Sensex, Nifty Poised For Weak Start As Middle East Conflict Deepens

Indian shares look set to open on a sluggish note Thursday as traders return to their desks after a holiday on Wednesday for Gandhi Jayanti.

On Tuesday, benchmark indexes Sensex and Nifty fluctuated before ending marginally lower. The rupee settled 3 paise lower at 83.82 against the dollar.

Rising geopolitical tensions may keep investors on edge, with the Israeli military saying it was conducting what it called “a precise strike” in Beirut and Iran’s President vowing a “stronger response” if Israel retaliates.

Traders may also react to the government’s decision to appoint three new external members to the RBI’s monetary policy committee and the new rules unveiled by capital market regulator SEBI to curb speculative trading in derivatives.

Asian stocks traded mixed this morning, with Hong Kong’s Hang Seng index falling over 3 percent on profit taking while Japan’s Nikkei surged more than 2 percent, tracking a weaker yen after the country’s new prime minister damped speculation about another interest-rate increase.

The yen fell almost 2 percent against the dollar, marking its worst day since June 2022 on PM Shigeru Ishiba’s dovish comments.

The dollar reached nearly a two-week high, Treasuries slid, and gold held steady as investors awaited Friday’s nonfarm payroll numbers for additional clues on the Fed’s next move. Oil ticked higher in early Asian trading as the Middle East conflict deepens.

U.S. stocks ended marginally higher overnight as signs of escalating geopolitical tensions in the Middle East offset data from payroll processor ADP showing stronger than expected private sector job growth in September.

The Dow, the tech-heavy Nasdaq Composite and the S&P 500 all ended flat with a positive bias.

European stocks closed on a mixed note Wednesday as investors remained wary about the possibility of a wider war in the Middle East.

The pan European STOXX 600 ended flat with a positive bias. The German DAX eased 0.3 percent, while France’s CAC 40 edged up marginally and the U.K.’s FTSE 100 added 0.2 percent.