Domestic equity markets open slightly higher on Tuesday tracking the positive cues from the Asian peers but domestic events weighed on the market sentiments. Traders will be keenly awaiting the speech of US Federal Reserve Chair Jerome Powell, later in the day, for cues over inflation and monetary tightening.
Back home, RBI would announce its monetary policy outcome on Wednesday, which will keep the traders on tenterhooks. Adani Group stocks would also be on trader's radars over Q3 results. However, intense FII selling is a concern for domestic equities.
At 9:20 am, the 30-share pack BSE Sensex jumped 93.92 points, or 0.16 per cent, at 60,600.82 whereas NSE's Nifty gained 24.2 points, or 0.14 per cent, at 17,788.80. Broader markets performed in the tandem with the headline peers as BSE midcap and smallcap indices were in green. Fear gauge India VIX eased down a per cent to 14.58-level.
"We had a nervous start for the week owing to sluggish global cues. The selling aggravated a bit in some of the heavyweights in the first half and in the process, the Nifty slid towards the 17,700 mark," said Sameet Chavhan from Angel One.
Fortunately, this intraday support provided a cushion to the weakness and due to modest recovery in the latter half, Nifty concluded the session with half a percent cut tad above 17,750. The banking space showed some resilience in the initial hour but eventually, it failed to sustain at higher levels, which resulted in yesterday’s sluggishness in the market, he said.
On a sectoral front, Nifty Metal index weakened the most. FMCG, realty and PSU Banks were the other indices trading in the red. However, buying in IT stocks supported the market sentiments. Auto, pharma and financial services indices were also trading with slight gains.
Adani Enterprises jumped 4 per cent, whereas Adani Ports surged 3 per cent ahead of its Q3 earnings later in the day. In the cash market, Adani Transmission and Adani Wilmar hit an upper circuit of 5 per cent each. ACC and Ambuja Cements were also up. However, Adani Total Gas, Adani Green Energy, and Adani Power shed another 5 per cent each for the day.
Barring the Adani Group stocks, Dr Reddy's jumped 2 per cent among the Nifty50 counters. Bajaj Finserv, Ultratech Cement and IndusInd Bank gained a per cent each. HDFC Life, Divis Labs, Britannia Industries and Tata Consultancy Services were other top gainers.
On the contrary, Tata Steel tanked over 3 per cent as the company reported net loss in December 2022 quarter. Hindalco declined about 3 per cent after its subsidiary Novelis reported a disappointing set of numbers. ITC, Hero Motocorp and HUL were the other top laggards.
There are huge uncertainties in the global equity markets now. The biggest uncertainty pertains to how the US economy is likely to perform this year. The Fed might continue to raise interest rates, perhaps twice more by 25 basis points this year. This is negative for capital flows to emerging markets, said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
"FIIs might continue to sell in India. In 2023, so far, FIIs were buyers only on 3 days and sold on all other trading days. Sustained FII selling and the Adani crisis have temporarily impacted sentiments. Investors may wait and watch for the dust to settle," he said. "High-quality stocks, particularly those which have declared good results, maybe slowly accumulated."
In the broader markets, Fairchem Organics tanked 12 per cent after the flow show in the third quarter. Mold-Tek Packaging tanked 12 per cent, whereas Llyod Steel and Vimata Labs were down 6 per cent each.
Among the gainers, Triveni Turbine jumped over 8 per cent, whereas Medplus Health Services rose 6 per cent after strong earnings performance. Valiant Organics, Varun Beverages and Jyoti Tyres rose 5-6 per cent each.
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