Global headwinds hint at tepid opening for Sensex, Nifty

Gift Nifty at 24,860 suggests a flat-to-negative start, influenced by rising US Treasury yields and uncertainties around US-EU trade talks. 

Indian equity markets are likely to open flat and remain volatile on Wednesday. Most Asian stocks are up in early deal on Wednesday; however, Gift Nifty at 24,860 signals a flat-to-negative opening.

Rising U.S. Treasury yields and weak global cues, including subdued Asian markets and uncertainty over U.S.-EU trade talks—where President Trump extended tariff deadlines to July 9—will weigh heavily on investor sentiment, said Vaibhav Vidwani, Research Analyst at Bonanza on May 27 2025:

With the result season ending, analysts said the focus will be on liquidity, especially FPI inflows. The market will consolidate further, they said.

FPI inflows in May have hit their highest levels in the past eight months on the back of de-escalation in Indo-Pak tensions, the possibility of a trade deal with the US, a weakening US Dollar and better-than-expected corporate earnings quarter for most companies. FPI inflows for May currently stand at ₹14,429 crore, the highest level since September last year, according to domestic brokerage Angel One.

Vaqarjaved Khan- Sr. Fundamental Analyst (CFA), Angel One.said: Despite the recent resurgence in FPI inflows, near-term uncertainties such as geopolitical risks and rising US Treasury yields, any slowdown in earnings in India can hurt FPI inflows. However, according to IMF data, India has become the fourth largest economy, surpassing Japan and is marginally behind Germany. “This shows that the long term growth story in India backed by consumption and in house manufacturing continues to remain intact. Meanwhile, India’s corporate earnings over the next 3-5 years is expected to compound at a growth rate of 14-17% as well. Hence, whenever valuations become attractive FPI inflows during such times will see a huge boost like the recent one in April and May,” he added.

Meanwhile, the F&O market witnessed a mixed trend in rollovers to next-month contracts (June) ahead of expiry.

According to Axis Securities, The Nifty May rollover stood at 52.2% on Monday compared to 29.8% on the same day of the previous expiry. “This is higher than the three-month average of 35.0% and the six-month average of 35.4 per cent. The rollover cost in May was 0.14% on Monday, down from 0.55 per cent on the same day of the last expiry, suggesting traders find it cheaper to roll over positions, it observed. However, Bank Nifty’s May rollover stood at 35.6% on Monday compared to 46.5% on the same day of the previous expiry. “This is lower than the three-month average of 47.9% and the six-month average of 47.2%,” it said.

The market-wide May rollover stood at 47.7 % compared to 40.4% on the same day of the previous expiry. This is higher than the three-month average of 35.1 % and lower than the six-month average of 35.3%. 

Published on May 28, 2025