Indian equities signal a cautious start amid weak global cues
Domestic equity benchmarks are set for a muted opening on Thursday, December 18, as global risk sentiment remains fragile following a sharp selloff in US technology stocks. Early indicators suggest that investors may stay on the sidelines at the open, weighing weak overseas cues against the absence of strong domestic triggers.
At around 7:45 am, the GIFT Nifty was trading near 25,882, marginally lower, pointing to a flat-to-cautious start for the Nifty 50 and Sensex. Market participants say the benchmark indices are likely to remain range-bound in the near term, with global developments continuing to dictate intraday direction.
Wall Street tech selloff dampens risk appetite globally
US equities closed sharply lower overnight, led by heavy selling in technology stocks as concerns resurfaced around stretched artificial intelligence valuations. The Nasdaq Composite fell close to two percent, underperforming broader indices as investors booked profits in high-flying tech names.
Shares of Nvidia, Broadcom and Oracle declined more than three percent each, dragging the S&P 500 down over two percent and extending its losing streak to a fourth consecutive session. The Dow Jones Industrial Average also slipped, giving up early gains as losses in industrial heavyweights offset defensive buying.
“The sharp pullback in US tech stocks has clearly shifted the mood to risk-off, and that is spilling over into global markets,” said a Mumbai-based market strategist. “When Wall Street sneezes, emerging markets usually catch a cold, at least in the short term.”
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Asian markets mirror weakness, safe-haven demand rises
Asian equities opened lower in early trade, tracking the overnight weakness on Wall Street. Markets in Japan and Australia slipped, while Hong Kong equity futures also pointed to a soft start. The cautious tone reflected investors’ preference for safety amid uncertainty around global growth and valuations.
The risk-off mood supported demand for shorter-tenure US Treasuries and precious metals, while the US dollar remained firm against major currencies. Analysts note that sustained weakness in global equities could keep pressure on Asian markets, including India, despite relatively stronger domestic fundamentals.
SEBI reforms and policy signals remain in focus domestically
On the home front, regulatory developments are likely to draw attention after the Securities and Exchange Board of India approved a broad set of reforms covering mutual fund rules, stock broker regulations, IPO disclosures and lock-in norms.
The regulator also announced steps to encourage the debt securities market, simplified the issuance and conversion of physical shares, and raised the threshold for classifying highly value debt listed entities to reduce compliance burden. However, proposals of the high-level committee on conflict of interest were deferred, leaving some regulatory uncertainty intact.
“SEBI’s reform agenda is structurally positive for the market, but in the near term, global cues will continue to dominate price action,” said a senior fund manager at a domestic asset management firm.
Crypto markets reflect caution as volatility persists
Global cryptocurrency markets echoed the cautious sentiment seen in equities. Bitcoin declined more than two percent on Wednesday before recovering part of its losses in early Thursday trade. Analysts observe that the digital asset has been drifting towards the lower end of its recent trading range.
“Every bounce in Bitcoin is attracting selling pressure from investors who entered near the record highs,” said a digital assets analyst. “That suggests risk appetite is still fragile across asset classes.”
Institutional flows provide underlying support
Despite weak global cues, institutional activity has remained supportive for Indian equities. Foreign institutional investors were net buyers in the previous session, purchasing shares worth over ₹1,100 crore. Domestic institutional investors also added to equities, with net inflows of nearly ₹770 crore.
Market participants say these flows reflect confidence in India’s medium-term growth outlook, even as short-term volatility persists. However, sustained buying may depend on stability returning to global markets, particularly in the US technology space.
Nifty technicals signal consolidation with defined levels
From a technical perspective, the Nifty 50 continues to trade within a consolidation phase. Analysts see the broader range between 26,220 on the upside and 25,700 on the downside, with the formation of lower highs keeping the upside capped for now.
Derivatives data points to growing caution among traders. Call writers have added fresh positions at at-the-money and nearby strikes, reinforcing overhead resistance, while put writers have reduced exposure and shifted positions lower, signalling expectations of sideways movement.
“A large buildup of call positions around the 26,000 strike makes it a strong resistance zone,” said analysts at SAMCO Securities. “On the downside, put writing near 25,500 provides a cushion, suggesting limited immediate downside unless global cues worsen.”
Market outlook remains cautious as global signals dominate
With Wall Street volatility, weak Asian cues and mixed signals across asset classes, Indian markets are likely to remain cautious at the open. While domestic fundamentals and institutional flows offer support, investors may prefer to wait for clearer global signals before taking decisive positions.
For now, market participants expect the Nifty and Sensex to remain range-bound, with stock-specific action and global developments driving intraday moves rather than broad-based trends.
