Global signals, which were not very strong, were tracked by Indian equity benchmark indices, and thus opened lower on Tuesday. The Nifty50 and the BSE Sensex both were negative at the beginning of the session, and this was a sign of hesitant investor sentiment at the year’s end.
The Nifty50 was at 25,902.85 around 9:19 AM, down 39 points or 0.15%, and has thus slipped below the important 25,950 mark. The BSE Sensex, on the other hand, lost 128 points, or 0.15%, and is now trading at 84,567.40.
Experts are cautiously backing the market, and they are suggesting that the equities will remain range-bound in the immediate future. For fresh cues, investors are closely watching macroeconomic indicators, global developments, and institutional fund flows.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, commented on the market trend saying that the current year-end weakness does not imply a major shift in market direction. He pointed out that lately, the advance-decline ratio has favoured declining stocks which has been the reason for Nifty’s almost 100-point drop during the prior session. Nevertheless, he mentioned that the fall occurred on quite low trading volumes.
According to him, a clear directional move is expected only in the early part of the new year, when large institutional investors return to active participation. He advised investors to stay patient for fresh triggers while selectively accumulating high-quality large-cap stocks during periods of market weakness. He also pointed out that auto sales numbers, which are going to be released in the next few days, could be a major source of information regarding the economy’s consumption recovery in terms of both strength and sustainability.
The global signals were mixed. On Monday, the most important stock indexes of Wall Street finished lower, thus starting the last trading week of the year not very promisingly. The major factor that caused the decline was the big technology stocks, which after the last week’s rally that was the main reason for the S&P 500 reaching record highs, decided to correct.
The Asian stock markets reflected the global cautious atmosphere on Tuesday, as the seven-day bull run in regional equities was stopped by losses in US tech stocks. Gold and silver markets were very active as both metals’ prices went up and down after coming down from the recent all-time highs.
In forex, the greenback remained steady as the market was waiting for the releasing of US Federal Reserve’s December policy meeting minutes which may give some hints concerning the future interest rates path.
Foreign portfolio investors (FPIs) sold stocks worth Rs 2,760 crore on Monday, thus continuing their trend of divesting Indian stocks. On the other hand, domestic institutional investors (DIIs) gave some support to the market, becoming net buyers of Rs 2,643 crore.
To sum up, analysts foresee that markets might undergo a period of consolidation in the short term, with the timing of their direction depending on the relief of global uncertainties and the emergence of new domestic and international triggers.
