Markets opened on a cautious note on Friday as the sharp overnight sell-off on Wall Street weighed on investor sentiment. However, the domestic market showed some resilience in early trade, with the Sensex holding on to modest gains even as the Nifty slipped into the red, reflecting a mixed start after Thursday’s sharp rally.
The BSE Sensex was trading at 79,444.15, up 134.14 points or 0.17%, at 9:28 am. It opened at 79,413.66 and touched an early high of 79,523.61.
The NSE Nifty 50 was at 24,508.95, down 27.65 points or 0.11%, at 9:29 am. The index opened at 24,538.20 and touched an early low of 24,388.05.
The muted start came after the Sensex surged 2,008.61 points, or 2.60%, to close at 79,310.01 on Thursday. The Nifty had gained 576 points, or 2.40%, to settle at 24,536.60.
WALL STREET CRASH WEIGHS ON SENTIMENT
Global cues remained weak after a sharp sell-off on Wall Street on Thursday. The Nasdaq 100 plunged more than 6%, while the S&P 500 fell 4.4%, as investors sold technology and semiconductor stocks amid concerns about the outlook for artificial intelligence spending and data-centre investments.
The sharp fall in US technology stocks raised concerns about a possible spillover into other markets. However, early trade suggested that Indian equities were holding up relatively better, with the Sensex in positive territory.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the US market rout would affect most global markets, but India could be among the least impacted.
He said the Nasdaq’s sharp fall was triggered by concerns over a possible slowdown in data-centre spending, amid opposition from Democrats to massive investments in the sector. Vijayakumar believes the resulting correction in technology stocks and the AI trade could eventually benefit India.
FIIs’ RETURN TO BUYING SUPPORTS INDIAN MARKETS
Foreign investor buying has emerged as an important support for domestic equities. Vijayakumar said FIIs had purchased equities worth Rs 35,781 crore over the last five trading sessions.
He expects foreign buying to continue despite selling and profit-booking by domestic institutional investors, which could help Indian markets remain resilient amid global volatility.
The strategist also pointed to improving corporate earnings as a fundamental support for the ongoing rally. He said earnings growth had been impressive and better than expected, while large-cap stocks had become attractively valued.
Vijayakumar highlighted the difference in performance between large-cap and small-cap stocks during Thursday’s rally. While the Sensex surged 2.6%, the Nifty Smallcap 100 gained only 0.67%, indicating that buying was concentrated in larger companies.
“For financials, tech and auto stocks there is more upside,” he said.
IT STOCKS DEFY WEAK GLOBAL TECHNOLOGY CUES
Despite the sharp fall in US technology stocks, Indian IT shares were among the gainers in early trade. Infosys rose 1.65%, TCS gained 1.68%, HCL Technologies advanced 1.48%, while Tech Mahindra was up 0.77%.
Mahindra & Mahindra led the Sensex gainers, rising 3.61%. Bharti Airtel advanced 1.72%, while Titan gained 1.55%. Sun Pharma and ICICI Bank were also trading higher.
On the other hand, Asian Paints was the biggest Sensex loser, falling 2.80%. Power Grid declined 2.32%, Bajaj Finance slipped 2.26%, while BEL and IndiGo fell 2.08% and 1.62%, respectively. Tata Steel, NTPC, Trent and Reliance Industries were also among the laggards.
MOST SECTORAL INDICES TRADE LOWER
Sectoral performance was mixed, with Nifty IT gaining 1.30% and Nifty Consumer Durables edging up 0.04%. Nifty Private Bank was marginally higher, while Nifty Pharma was almost flat.
Nifty Metal was the biggest sectoral loser, falling 2.23%. Nifty Realty declined 1.07%, while Nifty Oil & Gas slipped 1.11%. Nifty PSU Bank fell 0.87%, and Nifty Auto declined 0.57%. Financial services, FMCG and media stocks were also under pressure.
The broader market was weaker than the benchmark indices. Nifty 100 fell 0.29%, Nifty 200 declined 0.48% and Nifty 500 slipped 0.63%. Nifty Midcap 100 dropped 1.24%, while Nifty Smallcap 100 fell 1.75%.
India VIX, a measure of expected market volatility, rose 6.85% to 16.65, indicating increased nervousness among traders.
CRUDE OIL RISES, ADDING TO CAUTION
Crude oil prices also moved higher in early trade. Brent crude was trading at $100.50 per barrel, up 2.25%, while US West Texas Intermediate (WTI) crude rose 1.69% to $92.05.
The rise in oil prices could be an added concern for India, which depends heavily on imports to meet its crude requirements. A sustained increase could put pressure on the country’s import bill, inflation and corporate costs.
Vijayakumar believes the Indian market could remain resilient despite the global technology sell-off, supported by strong FII buying and improving earnings. He also sees further upside in financial, technology and automobile stocks.
However, the rise in volatility, weakness in broader markets and higher crude prices will remain important factors to watch. The immediate direction of the market will depend on whether domestic buying can absorb the pressure from global cues and whether the recent rally in large-cap stocks can sustain.
