Indian stock markets appear poised for a subdued opening this Friday, prompted by concerns surrounding a weakening rupee which has raised fears of foreign portfolio investors potentially offloading their holdings, reminiscent of October’s sell-off. Year-to-date, Foreign Institutional Investors (FIIs) have made net sales amounting to Rs 2.94 lakh crore in Indian equities.
Focus today might center on IT stocks, especially following Accenture’s report of exceeding quarterly revenue expectations, driven by robust demand for their new generation AI (genAI) services.
On Thursday, benchmark indices Sensex and Nifty both dropped over 1% each. This marked the fourth consecutive day of decline, influenced by hawkish commentary from the U.S. Federal Reserve that elevated yields and catalyzed a broad dollar rally.
The Indian rupee fell by 14 paise, closing at a historic low of 85.08 against the U.S. dollar.
Early trading on Asian stock markets mostly trended lower amid apprehensions that U.S. President-elect Donald Trump’s fiscal, trade, and tariff policies might pressure the Federal Reserve into halting its rate-cutting trajectory.
Both oil and gold prices headed for weekly declines as both the dollar and U.S. Treasury yields surged, underpinned by expectations of prolonged elevated interest rates in the United States.
In China, the People's Bank of India has opted to maintain its benchmark lending rates, countering market expectations of a rate cut.
Meanwhile, in Japan, the yen remained close to a five-month low, fueled by speculation that the Bank of Japan will refrain from raising interest rates in the foreseeable future.
South Korea’s currency approached its lowest point in over 15 years, pressured by the domestic political climate and the strengthening dollar.
In the U.S., equity markets closed flat after experiencing steep declines in a previous session due to the Fed's tightening stance.
Strong economic data supported the Fed’s cautious stance on further rate adjustments, with weekly initial jobless claims decreasing beyond expectations, existing home sales surging to an eight-month high, and Q3 GDP revised upwards, reflecting a 3.1% increase over the initially reported 2.8% growth rate.
The Dow Jones Industrial Average slightly gained ground after reaching its lowest point in over a month the previous day, while the tech-weighted Nasdaq Composite and the S&P 500 edged lower.
In Europe, stock markets tumbled to multi-week lows on Thursday following the Fed's hawkish forecast, combined with a slightly dovish rate decision from the Bank of England.
The pan-European STOXX 600 declined by 1.5%, reaching a three-week low, with Germany's DAX falling 1.4%, France's CAC 40 dropping 1.2%, and the U.K.'s FTSE 100 retreating by 1.1%.
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