Nifty, Sensex Set for Flat Start as GIFT Nifty Trades Steady

Domestic Markets Expected to Open Muted Amid Moody’s U.S. Credit Downgrade and Tepid Global Cues

Indian benchmark indices Nifty 50 and Sensex are poised for a lackluster start on Monday, May 19, as GIFT Nifty futures indicated a flat to slightly lower open. At 7:50 AM IST, the GIFT Nifty was down by around 25 points or 0.12%, reflecting investor caution following negative global cues, particularly after a surprise downgrade of the U.S. sovereign credit rating by Moody’s Investors Service. The downgrade from Aaa to Aa1 rattled global markets, impacting sentiment across equity, currency, and commodity segments.

Moody’s cited rising political instability and erratic policy frameworks as reasons for its decision, triggering a modest selloff in U.S. equity futures and weighing on Asian markets. This credit rating cut has added to existing concerns surrounding trade policy uncertainty, especially after U.S. Treasury Secretary Scott Bessent backed President Trump’s escalating tariff threats.

Highlights:

• GIFT Nifty was down 25 points or 0.12% at 7:50 AM IST, hinting at a flat to negative opening.

• U.S. equity futures fell 0.7% following Moody’s downgrade of U.S. credit rating.

• Weak global cues dent investor appetite as caution prevails ahead of key macro data.

• U.S. dollar index slipped 0.3% while Treasury yields moved higher, signaling risk aversion.

Asian Markets Trade Lower as Regional Economic Data, U.S. Credit Concerns Weigh on Outlook

Asian equities opened the week under pressure as markets digested Moody’s downgrade of the U.S. sovereign rating and braced for a slew of regional economic data releases. Japan’s Nikkei 225 slid 0.54%, while the broader Topix index was down 0.36%. South Korea’s Kospi dropped 0.47% and the Kosdaq was lower by 0.77%. In Australia, sentiment remained subdued, while futures for Hong Kong’s Hang Seng also pointed to a weaker start.

The MSCI Asia-Pacific Index (excluding Japan) dipped 0.2% in early trade, reflecting cautious sentiment. Market participants remained focused on macroeconomic cues from China and Japan, while also monitoring the trajectory of U.S.-China trade negotiations after recent tariff escalation rhetoric.

Highlights:

• Nikkei 225 down 0.54%, Topix down 0.36% amid global credit concerns.

• Kospi and Kosdaq down 0.47% and 0.77% respectively in South Korea.

• MSCI Asia-Pacific ex-Japan index dipped 0.2%, reflecting regional risk aversion.

• Hang Seng futures suggest weaker open as investor caution prevails.

Safe-Haven Buying Boosts Gold, Dollar Weakens Amid Credit Downgrade Shock

The downgrade of the U.S. credit rating triggered a rush into safe-haven assets, with gold prices gaining over 1% in early Asian trade. The softer dollar and rising geopolitical and trade-related tensions helped lift the yellow metal as investors sought refuge from equity market volatility. Gold’s uptrend reflects market unease around the economic consequences of Trump’s proposed tariffs and the uncertainty surrounding U.S. fiscal policy.

Meanwhile, the U.S. dollar index fell 0.3% as Treasury yields moved marginally higher. Currency markets reacted cautiously to signs of broader instability in U.S. policy direction, with forex traders weighing the risk of prolonged volatility ahead of further trade-related announcements.

Highlights:

• Gold rose over 1% as investors moved to safe-haven assets.

• U.S. dollar index slipped 0.3% in response to credit downgrade and trade tension.

• Treasury yields rose modestly, signaling a recalibration of risk expectations.

• Currency markets remained jittery ahead of tariff rate letters from U.S. administration.

Nifty Takes Breather Post-Rally but Weekly Charts Signal Strength

On the technical front, Nifty 50 showed signs of consolidation after its recent strong upward momentum. Friday’s session resulted in a very small red candle on the daily chart, suggesting some fatigue. However, the weekly chart paints a different picture, with the index forming a large green candle indicating a fresh breakout and signaling potential continuation of the uptrend.

According to Hrishikesh Yedve, AVP at Asit C. Mehta Investment Intermediates, the breakout suggests the Nifty could test levels between 25,500 and 25,800 in the medium term. Immediate support is now seen in the 24,800–24,850 range, and traders are advised to adopt a “buy on dips” approach as long as the index sustains above this critical support zone.

Highlights:

• Nifty formed a small red candle on daily chart, indicating consolidation.

• Weekly chart signals bullish momentum with a fresh breakout pattern.

• Index could target 25,500–25,800 in the medium term, per technical analysts.

• Immediate support seen at 24,800–24,850; strategy advised is buy-on-dips.