Indian benchmark indices opened flat on Tuesday, with the Sensex starting at 81,155.08 and Nifty at 24,798.65, as concerns over foreign institutional investor (FII) selling and rising US Treasury yields weighed on market sentiment.

“Foreign institutional investors have been net sellers of over ₹80,000 crore this month—one of the highest levels in four years,” said Vikas Jain, Head of Research at Reliance Securities. FIIs sold equities worth ₹2,261 crore on October 21, while domestic institutional investors bought equities worth ₹3,225 crore.

The market’s cautious stance comes as US Treasury yields hit three-month highs, with the 10-year yield reaching 4.18 per cent. “Long-dated Treasurys aggressively sold off on Monday amid growing worries about the prospects of a rising U.S. deficit,” noted Deepak Jasani, Head of Retail Research at HDFC Securities.

Early trading showed Infosys leading the gainers on NSE, up 1.20 per cent, followed by ICICI Bank at 1.12 per cent. The metal sector faced pressure with Tata Steel declining 1.66 per cent, emerging as the top loser. “The broader market saw a sharp decline, with mid-cap and small-cap indices dropping by up to 2 per cent,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities.

Technical analysts maintain a cautious stance as the Nifty trades within a defined range. “The zone of 24750-24650 continues to act as an immediate support zone,” said Ameya Ranadive, Senior Technical Analyst at StoxBox. Shrikant Chouhan of Kotak Securities identified 24700/80900 as key support levels, warning that “if these levels are breached, selling pressure might intensify.”

Asian markets showed mixed trends, while U.S. markets closed lower in their previous session. The Chinese central bank’s decision to cut interest rates provided some support to global markets, though this was offset by persistent concerns about U.S. Treasury yields.

Gold prices hit record highs before moderating, while crude oil showed recovery signs. “Gold initially rallied after Russian President Vladimir Putin proposed a new payment system for BRICS nations,” said Rahul Kalantri, VP Commodities at Mehta Equities.

Market participants await quarterly results from major companies including Bajaj Finance, Zomato, and ICICI Prudential. The RBI’s October Bulletin projected real GDP growth at 7.2 percent for fiscal year 2024-25, though it reduced its second-quarter forecast by 20 basis points to 6.8 per cent.

“The recent market correction may present a favorable buying opportunity for long-term investors,” suggested Jain, citing strong domestic economic growth and stable oil prices as supporting factors.

Published on October 22, 2024