Stock Market Update: Nifty50 Starts Steady; BSE Sensex Surpasses 81,700
The Indian stock market opened on a cautious note on Thursday, with both the Nifty50 and BSE Sensex showing minimal movement. The Nifty50 index hovered just above 25,050, while the BSE Sensex remained above 81,700. Market analysts suggest that ongoing currency depreciation and global challenges, particularly in the context of India-US trade negotiations, could limit market growth in the near term.
Market Performance Overview
As trading commenced, the Nifty50 was recorded at 25,057.50, reflecting a slight increase of 1 point or 0.0024%. Meanwhile, the BSE Sensex stood at 81,723.83, up by 8 points or 0.010%. Despite the flat opening, experts believe that seasonal demand and recent GST reforms provide some underlying support for the market. However, they caution that external factors, including currency fluctuations and international trade dynamics, may hinder significant upward movement.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, noted that the absence of immediate market triggers has led to a gradual decline. He highlighted the bullish trend in auto stocks, which are partly reflecting anticipated earnings growth in the sector. This year, the Indian market has faced considerable pressure due to persistent selling by foreign institutional investors (FIIs). The strategy of selling in India while investing in other markets has proven beneficial for these investors, contributing to the Indian market’s underperformance compared to its global counterparts.
Foreign Institutional Investors and Market Dynamics
The Indian stock market has seen a notable decline of 3.6% year-on-year for the Nifty index, contrasting sharply with gains in other markets such as the Hang Seng and Kospi, which have risen by 38.6% and 33.73%, respectively. This disparity in performance has encouraged FIIs to continue their selling spree in India. Dr. Vijayakumar emphasized that ongoing reforms and a low-interest-rate environment in India could eventually attract FIIs back to the market. However, the timeline for this recovery remains uncertain, and he advises investors to focus on accumulating high-quality stocks during this period of volatility.
Global Market Influences
In the broader context, US equities experienced a downturn for the second consecutive session, as investors took profits following a period of record highs. Federal Reserve Chairman Jerome Powell’s remarks on potentially elevated stock valuations have added to market caution, with investors now awaiting critical inflation data. Asian markets reflected mixed movements in response to the declines in the US, as the momentum from the recent AI-driven rally appears to be waning.
Gold prices saw a recovery on Thursday, buoyed by expectations of US interest rate cuts and ongoing geopolitical uncertainties. A weaker dollar also contributed to this upward trend ahead of significant economic announcements. Conversely, crude oil prices fell as traders took profits after a recent surge to seven-week highs, driven by unexpected declines in US crude stockpiles and concerns over supply disruptions from ongoing conflicts.
Investor Activity and Market Sentiment
On the domestic front, foreign portfolio investors sold shares worth Rs 2,425 crore on Wednesday, while domestic institutional investors stepped in as net purchasers, acquiring shares worth Rs 1,212 crore. This activity highlights the contrasting strategies of different investor groups amid the current market conditions. The overall sentiment remains cautious, with many investors closely monitoring both domestic and international developments that could impact market stability and growth.
As the market navigates these challenges, experts continue to advise patience and strategic investment in high-quality stocks, emphasizing the importance of long-term growth potential amidst short-term fluctuations.
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