Nifty eyes flat-to-positive open near 23,674; AI-driven Wall Street records and VIX cool-off support bulls, but fuel-price hike and WPI shock cap upside

Dow Jones rose 0.75% to 50,063 and Nasdaq gained 0.88% to 26,635, driven by Nvidia's H200 chip approval for select Chinese buyers and Cisco's strong earnings. Record US closes typically lift risk appetite in Asian and Indian markets at the open, supporting index heavyweights in IT (selectively), banking, and metals.

A ₹3/litre fuel price hike raises input costs across logistics, FMCG, and manufacturing sectors, while stoking consumer inflation. A reported WPI of 8.3% — far above the Bloomberg poll estimate of 5.5% — signals broad-based cost pressures from elevated crude and a weak rupee, complicating the RBI's rate path and squeezing corporate margins.

The rupee's slide toward 96/USD — driven by FII outflows, high oil import bills, and BoP concerns — raises import costs and pressures corporate earnings for import-heavy sectors. However, reports that the government is considering a cut in withholding tax on foreign bond investments triggered Thursday's rally and, if confirmed, could attract long-term dollar inflows and stabilise the currency.

A 15% decline in India's crude oil inventories since late February — driven by reduced imports amid the Iran conflict — raises the risk of refinery throughput cuts if supply constraints persist. This is a structural negative for downstream oil marketing companies and energy-intensive industries, and adds to the inflationary pressure already visible in WPI data.

Media coverage highlights that India's top software exporters are projected to lose $200 billion in market value from their peaks, with aggregate market cap reportedly down 45% since December 2024. Disruptive AI competition is cited as the primary driver. Nifty IT fell nearly 2% on Thursday, and the structural narrative remains a headwind for the sector even as global AI stocks rally.

Gift Nifty trading around 23,674-23,690 implies a near-flat start, suggesting the overnight global positivity is largely priced in after Thursday's 1.18% rally. Traders will watch whether Nifty can sustain above 23,700 and attempt a breakout above the 23,800 resistance flagged by analysts.

A 4.18% decline in India VIX signals reduced hedging demand and lower implied volatility, which typically supports index and options sellers. Lower VIX often correlates with steadier price action and can encourage fresh long positions, particularly in index futures and broader mid-cap names.

Xi's reported pledge not to supply military equipment to Iran and offer of assistance on the Strait of Hormuz reduces the tail risk of a full Hormuz blockade, which would be catastrophic for India's oil imports. A potential large Chinese Boeing order signals trade de-escalation. These developments are positive for global risk sentiment and partially offset energy supply fears.

Media coverage of Kaynes Technology's Q4 results references a sharp 20% fall in the stock following a disappointing March quarter earnings report, missed revenue forecasts, execution delays, and working capital concerns. Brokerages have reportedly downgraded the stock. This weighs on the broader electronics manufacturing services (EMS) theme.

Media coverage references a 32% year-on-year decline in Tata Motors' net profit for the March quarter, attributed to increased operational costs and challenges at Jaguar Land Rover, including the impact of US tariffs. JLR's annual profit reportedly fell 99%. Domestic PV business showed improvement per reports, but the headline number is a drag on sentiment for the auto sector.

Reports of a $1.3 billion consortium investment in Adani Airports by global investors signal continued institutional confidence in India's infrastructure growth story. Separately, reports that US authorities may settle fraud charges against the Adani group — with Adani's lawyer reportedly offering a $10 billion US investment — could reduce the legal overhang on Adani group stocks.