Indian Equity Market Opens Flat Amid Weak Sentiments; Sectoral Rotation Observed
Mumbai: The domestic benchmark indices opened on a subdued note on Wednesday as sectoral selling weighed heavily on the performance of key stocks. The Nifty witnessed declines across sectors, including auto, PSU banks, financial services, pharma, and metals.
At around 9:35 am, the Sensex was trading at 78,054.12, down by 84.89 points or 0.11%. The Nifty was at 23,617.55, lower by 27.25 points or 0.12%.
Despite the early decline, market sentiment remained positive, with more stocks advancing than declining. On the National Stock Exchange (NSE), 1,538 stocks were in the green, while 621 stocks were in the red.
Experts pointed out that the Indian equity market began the new year on a muted note, driven by macroeconomic challenges. “The near-term trend appears weak with weak GDP and earnings growth dominating the macro outlook,” market analysts said.
Sectoral and Index Performance
Among the sectoral indices, there was selling pressure in the Nifty Bank, which was down 46.65 points or 0.09%, at 50,813.55. On the other hand, the Nifty Midcap 100 index was trading at 57,270.40, gaining 70.95 points or 0.12%. The Nifty Smallcap 100 index posted a rise of 62.35 points, or 0.33%, to reach 18,831.55.
IT, FMCG, Media, and Energy sectors saw some buying activity, while major selling was seen in the auto, PSU banks, and pharma stocks. In the Sensex pack, Axis Bank, ICICI Bank, IndusInd Bank, Tata Steel, SBI, Nestle India, Tata Motors, M&M, and Maruti Suzuki were among the top losers. On the other hand, Sun Pharma, Asian Paints, Bajaj Finserv, L&T, TCS, Tech Mahindra, HCL Tech, and UltraTech Cement were among the top gainers.
Global Market Outlook
Globally, major US indices closed lower in the previous trading session. The Dow Jones fell by 0.07% to 42,544.22, while the S&P 500 and Nasdaq dropped by 0.43% and 0.90%, respectively, closing at 5,881.60 and 19,310.79.
In Asian markets, Jakarta and Hong Kong showed gains, while China, Bangkok, Seoul, and Japan posted losses.
Challenges and Expert Views
Market experts caution that the Indian market may face headwinds in the initial days of 2025, influenced by factors such as a strong US dollar (Dollar Index at 108.5) and high US bond yields. These could result in more Foreign Institutional Investor (FII) selling. Despite this, Domestic Institutional Investors (DIIs) have been buying, which has helped to offset some of the selling pressure.
“Even though FII selling is matched by DII buying, sentiments are leaning towards FIIs in the near-term, as valuations remain elevated,” experts noted.
Investors are advised to remain cautious and monitor key macroeconomic data, which could influence market movements in the near future.
FII and DII Activity
Foreign Institutional Investors (FIIs) sold equities worth Rs 4,645.22 crore on December 31, while Domestic Institutional Investors (DIIs) bought equities worth Rs 4,546.73 crore on the same day.
As we move into 2025, market participants will be keeping a close eye on global trends, domestic economic indicators, and any shifts in FII/DII activity that could set the tone for the months ahead.
