Indian markets open higher on private capex optimism despite rising crude prices

NEW DELHI: Indian markets opened higher on Friday, tracking gains across broader Asian indices and supported by strong domestic investment indicators. The BSE Sensex climbed 451.86 points, or 0.59 per cent, to trade at 76,604.72, while the NSE Nifty 50 advanced 63.55 points, or 0.27 per cent, to 23,937.00.

Across regional markets, Asian indices traded mostly higher, with Japan’s Nikkei 225 rising 1.07 per cent, Hong Kong’s Hang Seng gaining 2.07 per cent, and GIFT Nifty advancing 0.32 per cent to 24,008.50, despite minor losses in the Jakarta Composite.

V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that contradictory domestic and international signals continue to steer equity markets. “The flow of positive and negative news continues. The latest CMIE report of a sharp 97 per cent surge in private investment in Q1 FY27 over Q1 FY26 is an indication of a sharp turnaround in capex. After a long time, private capex is improving, and this bodes well for economic growth going forward”, Vijayakumar said.

He cautioned, however, that elevated borrowing costs across international debt markets present substantial headwinds for risk assets, noting that rising bond yields globally remain the biggest negative. “The US 10-year yield continues to hover around 4.8 per cent. In Japan, the 10-year yield is at a 30-year high of 3 per cent. In the UK, the 30-year yield is at 6 per cent. In India, too, the 10-year yield is close to 7 per cent”, he said.

In the US, overnight trading saw the S&P 500 advance 1.06 per cent and the Nasdaq gain 1.40 per cent, while Dow Jones Futures traded marginally lower by 0.04 per cent. “Rising bond yields are negative for equity markets. Higher inflation and a high possibility of interest rates going up will make fixed-income investments more attractive. Prospects of capital flight from emerging markets are also bright. These factors will weigh on equity markets”, Vijayakumar added.

He noted that resilience in GST collections, automobile sales and credit growth is counterbalancing these pressures, keeping near-term market movements volatile.

In commodity markets, gold extended its recovery as shifting interest rate expectations weighed on the dollar and fixed-income yields. At the time of reporting, Brent crude traded at USD 95.83, marking a gain of USD 0.31, or 0.33 per cent. Gold stood at USD 4,481.60, rising by USD 7.97, or 0.18 per cent. Crude oil climbed to USD 91.74, reflecting an increase of USD 0.44, or 0.48 per cent.

Manav Modi, commodities analyst at Motilal Oswal Financial Services Ltd, observed, “Bullion extended its recovery after Fed Governor Christopher Waller indicated he could support keeping interest rates unchanged at the September 15-16 meeting if incoming data confirm that inflation is continuing to moderate. Waller said August inflation readings would be crucial for his decision, while keeping the door open to further tightening should price pressures reaccelerate”.

Modi noted that Waller’s comments triggered a sharp repricing in rate expectations, with the probability of a September hike falling to around 50 per cent from nearly 70 per cent earlier this week. “Lower rate expectations typically support non-yielding gold by reducing the opportunity cost of holding bullion”, Modi added, pointing to a nearly 2 per cent surge in the Japanese yen and easing Treasury yields as additional factors supporting precious metals ahead of upcoming US labour and inflation releases. (ANI)