Indian markets set for weak start on February 6 as global cues turn cautious

Indian benchmark equity indices are poised to open lower on February 6 after a day of broad based losses at the domestic close and subdued global market signals. The GIFT Nifty was trading lower near 25,582.50 in early activity, pointing to a subdued opening for headline indices.

Market participants remained cautious after key domestic indices snapped a three-day gain. On Thursday the Sensex declined 503.76 points, or 0.60 percent, to finish at 83,313.93 while the Nifty eased 133.20 points, or 0.52 percent, to close at 25,642.80. Market breadth was negative, with 2,425 shares declining as against 1,601 advancing and 137 unchanged.

Foreign and domestic fund flow trends

On February 5 foreign institutional investors continued to exit the market, registering net sales of equities worth approximately ₹2,150 crore. Domestic institutional investors maintained buying interest for a fourth session in succession, acquiring shares valued at over ₹1,100 crore.

Global markets extend pressure

Asian markets opened with losses, adding to the recent sell-off in US markets that has weighed on risk sentiment. In the United States, all major indices retreated on Thursday, dragging global equities lower. The S&P 500 fell 1.23 percent to 6,798.40, the Nasdaq declined 1.59 percent to 22,540.59, and the Dow Jones Industrial Average slipped 1.20 percent to 48,908.72. Tech giants including Microsoft and Amazon underperformed after weak sector cues.

Fixed income and bond yields mixed

US Treasury yields showed a mixed trend in offshore trade, reflecting investor bid for safe yield assets amid broader risk aversion. Movements in bond markets suggested a cautious risk environment domestically and internationally.

Market watchers will keep an eye on global equity indices and domestic macroeconomic data to gauge direction for Indian markets in early trade