Weak Global Momentum Weighs On Indian Equities Ahead Of Wednesday's Trading

Indian equities are poised for a subdued opening on Wednesday, as global market signals remained mixed following fresh employment figures from the United States. A significant decline in crude oil prices—marking the lowest point since early 2021—is expected to influence energy sector stocks during the session.

The previous trading day saw the Sensex and Nifty both decline by approximately 0.6 percent, extending losses from the prior session. Currency pressure continued to hamper sentiment, with the Indian rupee facing persistent headwinds. The domestic currency weakened to hit 91 per dollar for the first time during intraday trading before partially rebounding to close 15 paise lower at 90.93 against the greenback. Uncertainty surrounding tariff policies and continuous foreign institutional outflows fueled broader risk aversion across the market.

Foreign institutional investors emerged as net sellers, offloading shares valued at Rs 2,382 crore, while domestic institutional buyers stepped in with net purchases of Rs 1,077 crore on Tuesday based on provisional exchange data. This divergence highlighted the challenge of managing external selling pressure amid domestic support.

Across Asia, equity markets painted a largely pessimistic picture, extending a three-session losing streak. The U.S. dollar showed little movement, hovering near a three-month low, which provided a tailwind for gold—prices climbed above the $4,300 per ounce mark. Oil underwent a technical bounce, rising just over 1 percent after plunging to nearly five-year lows amid supply surplus concerns and growing expectations around a possible Russia-Ukraine peace resolution.

American markets demonstrated volatility after employment and consumer spending data, ultimately closing mixed. October figures revealed job losses of 105,000, pushing unemployment to 4.6 percent—the highest since September 2021. However, November’s employment report showed 64,000 new jobs created, surpassing analyst predictions of 50,000 additions. The conflicting signals—weak labor market trends balanced against stronger-than-expected recent hiring—raised questions about the economic trajectory while maintaining pressure on the Federal Reserve to consider rate reductions.

Consumer activity weakened considerably, with U.S. business expansion reaching its slowest pace since June and retail sales stalling unexpectedly in October as households reduced expenditure amid heightened economic uncertainty.

Wall Street’s response remained muted: the Nasdaq Composite edged up 0.2 percent, the S&P 500 retreated 0.2 percent, and the Dow slid 0.6 percent. European bourses similarly struggled, with the Stoxx 600 falling 0.5 percent as economic indicators suggested the Eurozone’s recovery momentum had softened toward year-end. Germany’s DAX dropped 0.6 percent, France’s CAC 40 shed 0.2 percent, and the UK’s FTSE 100 fell 0.7 percent, reflecting the continent-wide cautious tone.

The combination of deteriorating labor market nuances, currency weakness, and external selling pressure suggests Indian equities will continue facing headwinds in the near term, with global cues remaining the primary driver of sentiment.