Pre-Market Nifty/Sensex Analysis Today, Nov 26: Nifty Likely to Open with a Gap-Up: Know the Six Catalysts Leading to a Positive Opening

Trends on the GIFT Nifty point toward a strong start to Wednesday’s session, with the index trading 122 points higher at 26,166 around 7:50 AM, indicating a gap-up opening.

In early trade, Asian markets were seen moving higher, while US equities rallied overnight. 

The 6 Big Positive Catalysts:

1. Wall Street’s continued strength, with US equities extending their upward momentum.
2. Renewed expectations of a December rate cut by the Federal Reserve. U.S. Treasury Secretary Scott Bessent confirmed that the recent 43-day federal shutdown resulted in an estimated $11 billion economic loss. Despite this, he emphasised that the US economy remains resilient and is unlikely to slip into recession, as per reports.
3. Revived confidence in the AI-driven trade.
   
4. Optimism regarding a potential US–India trade agreement.
   
5. FIIs turning net buyers, purchasing equities worth ₹785.30 crore.
6. A sharp decline in crude oil prices, with oil falling to $57.2/barrel — a five-week low — following reports of a revised Ukraine-Russia peace deal. President Zelensky noted that discussions with the US are ongoing, while Russia’s position remains uncertain.

Institutional Flows – FIIs and DIIs

On Tuesday, November 25, Foreign Institutional Investors (FIIs) were net buyers to the tune of ₹785.30 crore. Domestic Institutional Investors (DIIs) also maintained their buying streak, investing ₹3,912.47 crore — marking their 23rd consecutive session of net inflows.

Tuesday Market Action

After opening Tuesday’s session on a positive footing, Indian equity benchmark indices reversed direction and finished lower amid volatility. The Nifty 50 fell 0.29%, slipping below the 25,900 mark ahead of the November series monthly F&O expiry, while the Sensex declined 0.37%. Meanwhile, India VIX dropped over 7%.

Notably, the broader markets outperformed, with the Nifty Midcap and Nifty Smallcap 100 indices closing firmly in the green.

Wall Street On Tuesday

Wall Street recorded solid gains for the third consecutive session, driven by renewed expectations of a Federal Reserve rate cut in December. 

According to CME FedWatch, futures markets now estimate an 83% likelihood of a 25 basis point rate cut next month, a significant increase from 50% just a week ago. Notably, Tuesday’s gains came despite early losses during the session. 

By the close, the Dow Jones Industrial Average had risen by 1.4% to 47,112, the S&P 500 added 0.9% to 6,765, and the Nasdaq Composite advanced 0.7% to 23,025.

Gold Prices

Gold prices surged to $4,145 per ounce after dovish remarks from New York Fed President John Williams and Fed Governor Christopher Waller enhanced the outlook for a 25 basis point rate cut in December. According to CME FedWatch, the odds for the rate cut now stand at around 79%, further bolstering gold's appeal as a safe-haven asset.

Crude Oil Prices

WTI crude oil futures, currently at $58.09, are experiencing a downward trend, hitting a one-month low. This comes after OPEC adjusted its forecast to indicate a supply surplus in the third quarter, putting downward pressure on oil prices.