Indian benchmark indices Sensex and Nifty are likely to open on a cautious note on Thursday, with GIFT Nifty pointing to a largely flat start after domestic equities extended their decline in the previous session. GIFT Nifty was trading at 23,489 around 8 am, almost unchanged from its previous day close.

The Nifty fell 203.60 points, or 0.86 percent, to 23,431.50 on Wednesday, marking its lowest level in three months. The Sensex declined 813.35 points, or 1.08 percent, to 74,764.23 as selling intensified across several sectors, particularly information technology and realty.

Global market weakness is adding to the cautious backdrop. Asian equities declined on Thursday, with the MSCI broadest index of Asia Pacific shares outside Japan falling around 1 percent. Japan's Nikkei and South Korea's Kospi also fell more than 1 percent, following losses across US equities in the previous session.

Crude oil remains the key immediate macroeconomic concern for Indian markets. Brent crude climbed as high as $101.94 a barrel on Thursday after crossing the $100 mark in the previous session for the first time since July. Brent for November settlement was subsequently trading at $101.33 a barrel, while West Texas Intermediate gained 0.5 percent to $96.56 a barrel.

The rise in crude prices is intensifying concerns over inflation and interest rates, particularly for emerging markets such as India. Ponmudi R, CEO of Enrich Money, said elevated energy prices and firming bond yields were weighing on risk appetite. Brent above $101 and WTI around $96 to $97 are reinforcing inflation concerns and contributing to upward pressure on US Treasury yields.

Geopolitical risks are also keeping investors cautious as renewed attacks on shipping in the Middle East raise concerns over the security of energy supplies. The uncertainty surrounding the path towards de escalation is sustaining a geopolitical risk premium in energy prices.

US equities also closed lower on Wednesday. The Dow Jones Industrial Average declined 0.77 percent to 52,381.02, while the S&P 500 fell 0.48 percent to 7,636.46. The Nasdaq declined 0.64 percent to 26,253.34. Investors are increasingly focused on the Federal Reserve's policy direction, with Fed funds futures traders pricing in around a 60 percent probability of a US rate hike next week.

For the Nifty, the immediate technical resistance is seen around 23,550 to 23,600. A sustained move above 23,600 could open the path towards 23,800, while a break below 23,400 may extend the decline towards 23,200.

Foreign institutional investors remained net sellers for a second consecutive session on Wednesday, selling Indian equities worth Rs 582 crore. Domestic institutional investors continued to provide support, purchasing equities worth Rs 1,509 crore and extending their buying streak to 22 consecutive sessions.