Nifty 50 may open lower as Gift Nifty trades below previous close

External factors are contributing to cautious sentiment, with US 10-year bond yields remaining elevated and crude oil prices sustaining at higher levels despite a moderation from recent peaks. WTI crude is trading around $90 a barrel while Brent is near $98, keeping energy markets sensitive to geopolitical developments, particularly around the Strait of Hormuz.

Diplomatic efforts between the US and Iran have shown some progress, with Tehran receiving Washington’s response to a proposed seven-day trust-building plan. However, unresolved differences over the sequencing of measures mean the path to broader de-escalation remains uncertain, maintaining a risk premium in oil prices.

Gold prices are range-bound, oscillating between $4,169 and $4,195 per ounce on COMEX, though they continue to hold at higher levels. The precious metal’s strength reflects ongoing safe-haven demand amid mixed global cues.

On the inflation front, US August headline PCE inflation rose 3.4% year-on-year, below the 3.7% market expectation, while core PCE stood at 3.0%. This softer reading has eased immediate concerns about further Federal Reserve tightening, although Treasury yields remain high due to persistent inflation fears and stronger-than-expected growth linked to AI-driven investment.

Global markets are showing mixed signals. Japan’s Nikkei is up around 1%, supported by semiconductor strength, while South Korean equities face pressure from elevated bond yields and risk aversion. European indices are also under strain, with the STOXX 600 down 0.5% for the day and 2.5% for the month.

US equity markets closed lower on the day, with the Dow Jones falling 0.86%, the S&P 500 down 0.25%, and the Nasdaq gaining 0.24%. Despite monthly losses, the S&P 500 recorded its second consecutive quarterly gain.

Global bond markets continue to reflect tightening conditions, with the 10-year US Treasury yield posting its biggest monthly rise since September 2022. France’s 10-year yield saw its largest increase in nearly four decades, underscoring the broader trend of rising sovereign yields across major economies.

Investors remain watchful of how evolving inflation data, central bank policy expectations, and energy market developments will influence near-term market direction, particularly in emerging economies like India that are sensitive to global rates and oil prices.