Indian equities opened flat on Wednesday as they consolidate near record highs, contrasting with a global trend where a rally has tapered off, driven by optimism about potential U.S. rate cuts this year.
The 30-share BSE Sensex rose 200.02 points to 72,670.31 in early trade, while the NSE Nifty gained 60.40 points to 22,065.10.
Asian markets opened lower, with the MSCI ex-Japan down by 0.2%. Wall Street closed lower for the second consecutive session, following its best week in 2024. The Federal Reserve’s commitment to three rate cuts this year helped ease concerns over delays in policy easing after recent higher-than-expected U.S. inflation data.
Domestic and other Asian equities gained last week after the Fed’s comments on March 20. On Tuesday, the Nifty 50 and BSE Sensex each fell about 0.5%, weighed down by financials and information technology stocks. The IT index has dropped about 3% in the last two sessions following weak commentary from global bellwether Accenture on demand and client spending.
According to Prashanth Tapse of Mehta Equities, Nifty ended on a negative note due to concerns about the resilience of Nifty bulls amidst headwinds including Federal Reserve rate speculation and weak corporate guidance. Potential support for Nifty bulls lies in foreign institutional buying and global market momentum. Notable market movements include InterGlobe Aviation hitting a record high, Adani Ports’ acquisition, and fluctuations in oil and steel prices. Indian markets will be closed on March 29th for Good Friday. Trading strategies suggest buying opportunities with specific targets and stop-loss levels.
Analysts anticipate subdued domestic markets, with the Nifty 50 hovering around 22,000 levels in the next two sessions, ahead of the end of fiscal year 2024.
According to Shrikant Chouhan, Head Equity Research, Kotak Securities, both the Nifty and Sensex benchmark indices experienced a range-bound movement on Tuesday. The Nifty index closed 92 points lower, while the Sensex index closed 362 points lower. The Nifty Realty index saw a rise of 1.5 per cent, while the Media index saw a decline of over 1 per cent. Technically, the market remained within a range of 21950 to 22075/72300 to 72700, after falling in the intraday range throughout the day. Even on the daily chart, the index formed an inside body candle, which indicates indecision between bullishness and bearishness. Their view is that the market is currently experiencing positive consolidation. For the bulls, a 50-day SMA or 21880/73100 could be the crucial support level. For the day, there could be a gradual weakness if the Nifty remains below 21950.
Both the Nifty 50 and Sensex are poised for their fourth consecutive quarterly gains, adding about 27% and 23%, respectively, in fiscal 2024. Foreign portfolio investors bought shares worth ₹10.13 crore (about $1.2 million) on a net basis on Tuesday, while domestic institutional investors bought a net ₹5,024 crore of stocks.