India’s benchmark indexes are expected to open marginally higher on Wednesday, although analysts expect caution to prevail due to worries over slowing corporate earnings and sustained foreign outflows.
The GIFT Nifty futures were trading at 23,289.5 as of 8:10 a.m. IST, indicating that the blue-chip Nifty 50, will open above Tuesday’s close of 23,176.05.
The benchmark Nifty 50 and BSE Sensex indexes rose on Tuesday, led by financials and metals. They recouped some of their losses from Monday when both blue-chips plunged to seven-month lows.
The Nifty has fallen 2% in January and is nearly 12% below a record high hit on Sept. 27, 2024.
Indian equity benchmarks end higher, led by financials, metals
“While there is short-term relief in the market after a sharp drop on Monday, overall weak global cues, a falling rupee, low earnings growth and foreign outflows continue to weigh on sentiment, keeping the overall outlook cautious,” said Siddhartha Khemka, head of research of wealth management at Motilal Oswal Financial Services.
Foreign institutional investors (FII) have sold Indian shares worth 278.92 billion rupees ($3.2 billion) in January so far, hurt by the prospect of fewer U.S. rate cuts in 2025, which makes emerging markets, such as India, a less attractive investment.
The rupee logged its worst session in two years on Monday. The currency weakened to another all-time low in the prior session, hurt by sustained foreign outflows and a stronger dollar.
Meanwhile, other Asian markets opened little changed on the day, ahead of the U.S. consumer price data, due later on Wednesday.
Wall Street equities closed higher overnight after data showed that U.S. producer prices rose less than expected in December.
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