Positive Opening Signals as Global Tech Rally, AI Trade, and Earnings Drive Market Sentiment
The Indian equity market is poised for a positive opening, supported by a confluence of global and domestic cues that are improving overall risk appetite. Easing geopolitical tensions, a technology-led rally across Asian markets, strong corporate earnings from the United States, and renewed momentum in the global AI trade are collectively shaping a constructive start to the trading session.
However, beneath the surface optimism, positioning data indicates caution. Foreign Institutional Investors continue to remain net sellers for the eighth consecutive session, with FII short positions holding steady at elevated levels. This divergence between price action and positioning suggests that markets may continue to trade in a narrow range, with sharp stock-specific moves driven by earnings and sectoral triggers.
Morning Cues Supporting a Positive Opening
Several early indicators point toward a green start for Indian equities. GIFT Nifty is trading higher, reflecting positive overnight cues from global markets and reinforcing expectations of an upbeat opening.
Asian markets are witnessing a tech-led rally, fueled by strong results from Taiwan-based semiconductor major TSMC. The improved outlook for advanced computing and artificial intelligence-related demand has lifted sentiment across regional technology stocks.
Easing geopolitical tensions combined with strong global earnings often create short-term tailwinds for equity markets.
Global Markets: US Leads With Earnings Strength
US markets ended the previous session higher, with the Dow Jones gaining nearly 300 points. The rally was supported by stronger-than-expected US economic data and robust quarterly results from major financial institutions.
Goldman Sachs surged more than 4 percent, while Morgan Stanley added nearly 6 percent following their quarterly earnings announcements. BlackRock also reported strong numbers, reinforcing confidence in the resilience of the US financial sector.
US futures are trading flat after Wall Street snapped a two-day losing streak, indicating consolidation rather than reversal. Stability in US markets often provides a supportive backdrop for emerging markets, including India.
AI Trade Momentum and Semiconductor Developments
The global AI trade has regained momentum following strong results from TSMC, which is widely viewed as a bellwether for advanced semiconductor demand. Improved visibility on AI-driven capital expenditure is benefiting technology stocks across Asia and the US.
In parallel, recent developments in the US–Taiwan semiconductor relationship have drawn market attention. While the US has imposed tariffs on certain advanced computing chips, broader cooperation and investment commitments continue to support long-term capacity expansion.
Semiconductor earnings often serve as an early indicator of the health of the global technology cycle.
Commodities: Crude Oil, Gold, and Silver
Brent crude has declined sharply, falling nearly 4 percent to below $64 per barrel. The drop follows easing fears of potential US action in Iran and reports suggesting a possible withdrawal of troops from parts of the Middle East.
Lower crude prices are generally supportive for the Indian economy, helping contain inflationary pressures and improve the trade balance.
Precious metals have also seen some pressure. The US held off imposing tariffs on silver, leading to a decline in silver prices, while gold witnessed a marginal dip. Despite these moves, most asset classes remain broadly unchanged, indicating a stable macro backdrop.
Geopolitics: Signs of De-escalation
Geopolitical risk has eased on multiple fronts. Reports indicate that Moscow has agreed with US leadership that Ukraine is holding a peace deal, reducing immediate escalation concerns.
In the Middle East, continued minor sanctions combined with de-escalatory signals have helped calm energy markets. Such developments lower global risk premiums and improve sentiment across equity markets.
Markets tend to reward de-escalation more than resolution, as reduced uncertainty allows capital to re-enter risk assets.
India: Trade Developments and Macro Signals
On the domestic front, positive commentary continues around the India–EU Free Trade Agreement and progress on the US–India trade pact. These discussions are seen as structurally positive for exports and manufacturing competitiveness.
India’s exports to China have reportedly risen by $5.5 billion. However, the trade deficit has widened to a record $116 billion, highlighting the ongoing challenge of import dependence despite export growth.
Markets appear to be balancing optimism around trade agreements with caution around external imbalances.
Index View: Range-Bound With Stock-Specific Action
Nifty and Nifty Bank continue to trade within a narrow range, reflecting indecision at index levels. Pre-budget positioning has largely remained muted, with the exception of select activity in railway stocks during the previous session.
Small-cap stocks are showing strength for the second consecutive day, as value buying emerges after recent corrections. This suggests selective risk appetite rather than broad-based bullishness.
IT stocks may witness short covering, particularly in large-cap names, following Infosys results. With FII shorts remaining elevated, any positive trigger could force tactical covering in beaten-down sectors.
FII Positioning: A Note of Caution
Foreign Institutional Investors remain net sellers for the eighth straight session. Importantly, FII short positions remain unchanged at around 92 percent, indicating persistent caution.
This positioning suggests that while markets may open higher, sustained rallies could face resistance unless there is a meaningful shift in institutional flows.
High short positioning increases the probability of sharp moves, but direction depends on trigger strength.
Key Sectors and Trading Bias
Based on current cues, metals and railway stocks remain key long candidates, supported by commodity trends and policy-driven visibility. Select capital market stocks may also see interest amid stable global cues.
Private banks and realty stocks are expected to remain under pressure, reflecting valuation concerns and cautious institutional positioning.
Action Points for the Day
Several important events are lined up that could influence intraday sentiment and stock-specific moves.
India’s forex reserves data will be released at 5 pm, offering insight into external stability and currency dynamics.
Q3 earnings announcements are due from Reliance Industries, Wipro, Tech Mahindra, L&T Finance, JSW Infra, Polycab, Poonawala Fincorp, Federal Bank, Himadri Speciality Chemical, Kesoram Industries, and Central Bank of India.
Best Agrolife trades ex-stock split, reducing face value from ₹10 per share to ₹1 per share, and ex-bonus issue in the ratio of 1:2.
Investor Takeaway
• Global cues and earnings support a positive opening, but follow-through is key.
• Technology and AI-linked stocks remain in focus globally and domestically.
• Elevated FII shorts signal caution despite improving sentiment.
• Stock-specific earnings and sectoral themes will dominate near-term moves.
Read free content at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Gulshan Khera
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
