Indian benchmarks may open higher; foreign flows, US fiscal woes seen capping gains

India’s benchmark indexes are likely to open higher on Friday, after logging a decline of 1.65% so far this week, although lingering concerns over foreign inflows and the United States’ worsening fiscal health could limit gains.

Gift Nifty futures were trading at 24,692.5 as of 7:59 a.m. IST, indicating that the Nifty 50 will open above its previous close of 24,609.7.

Foreign portfolio investors (FPIs) sold Indian shares worth 50.45 billion rupees ($586.8 million) on Thursday, as per provisional data, the third such session of selling in four days.

Thirty-year U.S. bond yields reached their highest level in 19 months before easing on Thursday, after the U.S. House of Representatives passed President Donald Trump’s tax bill, which is expected to add about $3.8 trillion to the federal government’s debt pile over the next decade.

Indian shares fall on US fiscal worries, rising Treasury yields

Concerns over mounting debt and Moody’s downgrade of the U.S. credit rating last week have weighed on stocks globally in the last few sessions.

Rising Treasury yields tend to make bonds more attractive to foreign investors, driving out capital from stocks in emerging markets such as India.

Asian markets were cautious on the day, with MSCI Asia ex Japan up 0.1%, after a 0.9% drop in the previous session.

The short-term trend in India remains weak and any rise towards the 24,800 level on Nifty could attract selling pressure, said Rupak De, senior technical analyst at LKP Securities.