Stock markets opened on a volatile note on Wednesday, with the Sensex and Nifty giving up early gains to trade marginally lower as rising crude oil prices and sustained foreign investor outflows weighed on sentiment. Investors also remained focused on corporate earnings following Tuesday’s sharp rally led by information technology stocks.
The BSE Sensex was trading at 73,002.54, down 31.24 points or 0.04%, at around 9:27 am. The index opened at 73,049.76, after closing at 73,033.78 in the previous session, and moved between 72,894.41 and 73,178.98 in early trade.
The Nifty 50 was down 23.15 points, or 0.10%, at 22,698.80 around 9:28 am. It opened at 22,715.75 and moved between 22,663.80 and 22,752.30.
The opening session was choppy, with the benchmarks initially trading higher before slipping into negative territory. The muted start followed a rally of around 1.6% in both indices on Tuesday.
IT STOCKS LEAD, BROADER MARKETS MIXED
Information technology stocks continued to support the market, with TCS rising 2.25%, Infosys gaining 1.74%, HCLTech advancing 1.68% and Tech Mahindra trading 0.35% higher.
Among other gainers, Kotak Mahindra Bank rose 0.95%, BEL gained 0.61% and Asian Paints advanced 0.47%.
However, selling pressure was visible across several heavyweight stocks. Bajaj Finance fell 1.30%, Eternal declined 0.95%, Sun Pharma dropped 0.91% and Bajaj Finserv lost 0.90%. Power Grid, Larsen & Toubro, Adani Ports and Axis Bank were also trading lower.
The broader market was largely weak. The Nifty 100, Nifty 200 and Nifty 500 indices were marginally lower, while the Nifty Midcap 50, Midcap 100 and Smallcap 100 were also in the red.
IT AND FMCG HOLD UP, FINANCIALS UNDER PRESSURE
Sectoral performance was mixed, with the Nifty IT index rising 1.43%, while the Nifty FMCG index gained 0.16%. The Nifty MidSmall IT & Telecom index was also up 0.49%.
On the other hand, the Nifty Financial Services 25/50 index fell 0.64%, while the Nifty PSU Bank index declined 0.73%. Pharma, healthcare, auto, realty and consumer durables stocks were also under pressure.
India VIX, the market’s volatility gauge, rose 2.99% to 14.54, indicating an increase in expected market volatility.
CRUDE OIL, FOREIGN OUTFLOWS IN FOCUS
Rising crude oil prices and continued foreign investor selling remain key concerns for domestic equities. Brent crude was trading around $106-$107 a barrel, according to the market commentary, keeping concerns over India’s import bill and inflation in focus.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said Tuesday’s sharp rally in the Nifty came as a surprise in an otherwise weak market and was partly driven by short-covering.
He said Finance Minister Nirmala Sitharaman’s comments on reviewing stakeholder feedback on LTCG tax and STT had raised hopes of possible changes in equity taxation, supporting investor sentiment.
Vijayakumar also noted that measures by the Reserve Bank of India to restrict speculation in the currency market had helped the rupee appreciate over the previous two trading sessions, reducing FII selling pressure.
However, he cautioned that the US 10-year bond yield hovering around 5.2% and Brent crude near $106 remained significant headwinds. He said the rally could struggle to sustain, although financials, telecom, metals and automobiles could remain resilient on expectations of strong second-quarter earnings.
