Indian stock markets are poised for a lower opening on Tuesday, as growing expectations of higher global interest rates continue to drive foreign capital outflows from the domestic market. This trend is occurring against the backdrop of subdued global market sentiment.
As of 7:53 a.m. IST, India’s GIFT Nifty was down 0.4% at 19,655 points on the NSE International Exchange.
In the previous trading session, the Nifty 50 and the S&P BSE Sensex closed relatively unchanged at 19,674.55 points and 65,958 points, respectively. Both benchmarks have experienced a decline of nearly 3% since reaching all-time highs in mid-September.
The recent hawkish tone struck by the U.S. Federal Reserve has sent a clear message to the markets that interest rates are likely to remain elevated well into the next year. Higher interest rates can reduce liquidity in financial markets and increase the cost of capital, which tends to influence investor behavior.
Foreign investors have been net sellers in the Indian market this month, offloading shares worth $1.36 billion as of September 22. This comes after they poured in over $15 billion into Indian equities earlier this year.
On Monday, foreign institutional investors sold shares valued at 23.33 billion rupees, while domestic investors purchased shares worth 15.79 billion rupees, according to provisional exchange data.
The ongoing dynamic between global interest rates and capital flows will likely continue to influence Indian stock market performance in the near term, as investors closely monitor both domestic and international economic developments.