Wall Street gains and a stronger rupee set a steadier tone, but oil near $109 hangs over Dalal Street

US stocks extended their run on Wednesday, the rupee ended at its strongest in six weeks and foreign investors turned buyers of Indian shares. That mix gives Dalal Street a steadier backdrop on Thursday than it has had for much of the week, but crude oil above $108 a barrel and a hawkish set of Reserve Bank minutes are likely to keep any rally in check.

Indian shares had a poor Wednesday. The Sensex surrendered an 800-point morning gain to close 143.21 points lower at 73,709.69, and the Nifty 50 fell 77.60 points to 22,811.35. The Nifty Smallcap 100 fell 2.37% and the Midcap 100 1.58%.

Overnight on Wall Street

The Nasdaq Composite rose 1.05% to 26,702.86, led by technology shares. The S&P 500 gained 0.58% to 7,757.17 and the Dow Jones Industrial Average added 0.69% to 52,856.09.

SpaceX shares jumped 7.79% after the company reported its first profit as a listed company, $4.4 billion. Super Micro Computer rose 9.55% after raising its revenue outlook. Netflix fell another 5.31% on a weaker profit forecast for the December quarter, and AT&T dropped 6.45% even after beating estimates, on worries about competition from Starlink’s mobile service.

After the bell, Meta Platforms rose about 3.3% on $64.6 billion of quarterly revenue and a fourth-quarter forecast of $73 billion to $76 billion. IBM added about 3% in late trade after beating estimates for revenue and earnings, a reading Indian software exporters, the only sector to rise in Mumbai on Wednesday, will carry into the session. Tesla was little changed and Lam Research, a chip equipment maker, fell about 6.3%.

Yields, oil and gold

US Treasury yields edged up. The 10-year yield rose one basis point to 5.13% and the two-year yield two basis points to 4.81%.

Oil remains the biggest worry for India, which imports most of its crude. Brent for December delivery topped $110 during the day as the standoff with Iran dragged on, before settling almost flat at $108.82. US crude fell 0.69% to $97.15, even though American inventories dropped by 3.06 million barrels against an expected 0.1 million. Gold for December rose 0.18% to $4,150 an ounce, and the dollar index was barely changed at 101.69.

Overseas data was mixed. UK inflation rose to 3.5% in September, above the 3.4% forecast, while Japan’s exports grew 16.7% from a year earlier, short of the 20.1% expected.

The rupee and the flows

The rupee closed 53 paise stronger at 94.38 to the dollar on Wednesday, its best finish since early September, helped by dollars coming in for the Jio Platforms share sale and by the Reserve Bank’s intervention. Foreign investors bought ₹1,022.32 crore of Indian shares on the day, after selling on Monday.

“USD-INR spot price is expected to trade in a range of Rs 94.20 to Rs 94.80,” said Anuj Choudhary, research analyst at Mirae Asset Sharekhan. Gaurav Garg, head of research at Lemonn, warned that Brent above $110 made the recovery hard to sustain.

What to watch at the open

The minutes of the RBI’s October meeting, published on Wednesday evening, said rate cuts are off the table in the near term and showed Governor Sanjay Malhotra worried about “increasing signs of generalisation of inflation”. Banks and other rate-sensitive stocks will be the first to price that in.

Eternal, the parent of Zomato and Blinkit, trades for the first time after its profit nearly doubled to ₹125 crore. The Jio Platforms offer, subscribed three times on its first day, enters its second day, and Hindustan Petroleum, Swiggy, Havells India and Colgate-Palmolive (India) are among the companies reporting results.