Indian equity markets opened flat to slightly lower on Wednesday, despite positive cues from global peers, as investors remained cautious ahead of the monthly derivatives expiry and key US economic data later this week.

The benchmark BSE Sensex opened at 84,836.45, down 77.59 points or 0.09 per cent from its previous close of 84,914.04. The broader NSE Nifty50 index started the day at 25,899.45, declining 40.95 points or 0.16 per cent from Tuesday’s close of 25,940.40.

As of 9:30 am, Power Grid Corporation was the top gainer on the NSE, surging 3.99 per cent, followed by Mahindra & Mahindra (1.57 per cent), Hindalco Industries (1.08 per cent), Tata Steel (0.60 per cent), and Eicher Motors (0.60 per cent). On the flip side, HCL Technologies (-0.93 per cent), Tech Mahindra (-0.92 per cent), Britannia Industries (-0.77 per cent), LTIMindtree (-0.76 per cent), and Asian Paints (-0.72 per cent) were among the top losers.

Market sentiment was influenced by mixed global cues, with Asian markets trading higher following China’s announcement of stimulus measures to boost its economy. The People’s Bank of China cut the one-year medium-term lending facility rate to 2 per cent from 2.3 per cent, which briefly pushed the Chinese yuan to its strongest level in over a year.

Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, commented on the market outlook: “Markets may see a subdued start amid sluggishness in the Gift Nifty index even as most of other Asian indices are exhibiting optimism after China’s stimulus announcements to boost its economy. Hence, there could be some traction seen in local commodities, including metals.”

Metal stocks are expected to be in focus today, as base metal prices surged on the London Metal Exchange following China’s stimulus announcement. Additionally, mining stocks may see interest after a 7 per cent surge in mining prices in the Asian market.

The oil and gas sector could also attract attention, with Brent crude oil prices rising 2 per cent to a one-month high of $75.2 per barrel. This increase was driven by OPEC+ raising global demand forecasts and heightened tensions in the Middle East following an Israeli strike on Hezbollah targets in Lebanon.

Gold prices hit another all-time high, reaching $2,660 an ounce, as weak US data bolstered the case for deeper rate cuts. Rahul Kalantri, VP Commodities at Mehta Equities Ltd, noted: “Gold witnessed an impressive rally on Tuesday, breaking another record high, and Silver wasn’t far behind, hitting its best level in nine weeks. People are rushing to these safe-haven metals as uncertainty continues to hang around.”

The monthly derivatives expiry scheduled for Thursday is expected to result in sideways movement in intra-day trades. Vikas Jain, Head of Research at Reliance Securities, stated: “NIFTY-50 has closed at all time high near to 26,000 levels and we expect some retracement from the higher range of 26,050- 26,180 levels, as markets could be volatile with respect to rollover movement.”

Investors are closely watching for the key U.S. PCE inflation data due on Friday, which could provide indications of future rate cut prospects. The recent U.S. consumer confidence data showed the biggest one-month decline in more than three years, hitting 98.7 for September.

Foreign Institutional Investors (FIIs) sold shares worth a net ₹2,784.14 crore on Tuesday, while Domestic Institutional Investors (DIIs) bought shares worth a net ₹3,868.31 crore, according to provisional data.

As the trading session progresses, market participants will be keeping a close eye on stock-specific movements and global cues for further direction.

Published on September 25, 2024