Sensex, Nifty To Follow Global Peers Lower As Recession Worries Resurface

Indian shares may open lower on Friday, tracking weak global markets on concerns whether the U.S. Federal Reserve will be able to orchestrate a soft landing for the world’s largest economy.

Global sentiment remains fragile on concerns about U.S. growth slowing too quickly and inflation remaining stubbornly high.

The latest PMI data from the euro area also signaled a negative outlook for the region’s manufacturers.

Benchmark indexes Sensex and Nifty ended modestly higher on Thursday after hitting new record highs early in the session.

Asian markets followed Wall Street lower this morning, with Japan’s Nikkei falling more than 4 percent as the yen and Swiss franc surged higher on safe-haven demand.

U.S. Treasury yields plunged, with the U.S. two-year to 10-year note yields dropping to six-month lows, below 4 percent.

Gold ticked higher in Asian trade ahead of the all-important U.S. jobs data due later in the day.

Oil edged up slightly but was on course for a fourth weekly fall as demand concerns overshadowed worries of a broadening Middle East crisis.

U.S. stocks tumbled overnight as a fresh dose of weak economic data reignited recession fears and offset upbeat earnings news from Facebook parent Meta Platforms and optimism about a near-term interest rate cut by Federal Reserve.

Early gains evaporated as data showed manufacturing activity contracted sharply in July and weekly jobless claims jumped to an 11-month high.

The tech-heavy Nasdaq Composite lost 2.3 percent, the S&P 500 declined 1.4 percent and the Dow dipped 1.2 percent.

European stocks also fell sharply on Thursday after the release of downbeat Eurozone PMI and unemployment data.

Meanwhile, the Bank of England cut rates for the first in over four years and signaled further cautious reductions ahead.

The pan European STOXX 600 dropped 1.2 percent. The German DAX slumped 2.3 percent, France’s CAC 40 plummeted 2.1 percent and the U.K.’s FTSE 100 gave up 1 percent.