Indian stock markets experienced a subdued opening on Wednesday, with both the Sensex and Nifty indices starting the day in negative territory. The Sensex, the benchmark index of the Bombay Stock Exchange (BSE), fell over 150 points in early trade. Similarly, the Nifty 50, the key index of the National Stock Exchange (NSE), slipped below the 24,800 mark. This downturn reflects a cautious sentiment among investors, influenced by a mix of global cues and ongoing profit booking.
Among the prominent stocks, ITC (formerly Indian Tobacco Company) emerged as a significant drag on the market, witnessing a sharp decline of 4%. This drop in ITC shares is primarily attributed to the company's recent earnings report, which seems to have disappointed market expectations. The FMCG (Fast-Moving Consumer Goods) sector, in general, felt the pressure due to ITC's poor performance.
Conversely, some stocks defied the overall negative trend. Hindustan Copper, for instance, saw a notable gain of 3%, driven by strong volume action. This suggests positive investor sentiment towards the company, potentially fueled by encouraging news or expectations of future growth.
On Tuesday, the Indian equity benchmarks had closed in the red, reversing earlier gains. The Sensex declined by 624 points, while the Nifty slipped by 175 points. This decline was attributed to profit booking in financial and IT stocks, coupled with weak global cues and muted activity from Foreign Institutional Investors (FIIs). However, mid- and small-cap indices showed resilience, supported by strong Q4 earnings across select companies.
Despite the current volatility, analysts suggest that positive cues from the US market, a weak dollar, and soft gold prices could provide a favorable macro environment for the equity market. Large liquidity with mutual funds and sustained SIP (Systematic Investment Plan) inflows are also expected to encourage fund managers to continue buying.
Investors are also keeping a close watch on specific stocks like Life Insurance Corporation (LIC). The state-owned insurer reported a 38% year-on-year jump in consolidated net profit for the March quarter and declared a final dividend of Rs 12 per share for FY25. This news could lead to increased attention and potential gains for LIC shares.
Globally, Asian markets opened with gains, mirroring a rally on Wall Street driven by a rebound in US consumer confidence and a surge in bonds. This positive sentiment could potentially influence the Indian markets as the trading day progresses.
Overall, the Indian stock market is currently experiencing a period of volatility, influenced by a combination of domestic and global factors. Investors are advised to remain cautious and monitor market developments closely.
