Benchmark stock market indices started the day in a downturn on Tuesday due to concerns over FII selling. Early trading saw FMCG and IT stocks opening in negative territory.
The S&P BSE Sensex was down by 16.48 points at 84,884.23, while the NSE Nifty50 dropped 4.55 points to 25,954.95 by 9:28 am.
According to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, the Nifty’s attempt to break the September 2024 high and set a new record is facing resistance from significant FII selling, which amounted to Rs 4,171 crores in the cash market the previous day.
Dr. Vijayakumar mentioned that global market signals were mixed for the day, with positive momentum in U.S. markets and expectations of a 25 basis point rate cut from the Fed supporting global equities. However, concerns over a potential AI bubble were raised following a sharp 2.69% rally in Nasdaq and a rebound in Mag 7 stocks. India’s market stability would improve when the AI trend weakens, leading to increased investments in emerging markets like India and non-AI stocks.
Among the top performers, Reliance Industries led with a 0.39% gain. Following closely, Bharat Electronics rose by 0.98%, Tata Steel by 0.79%, State Bank of India by 0.49%, and Bajaj Finance Services by 0.49%.
On the downside, Power Grid registered the steepest decline at 0.83%, followed by Infosys at 0.72%, Tech Mahindra at 0.53%, Adani Ports at 0.45%, and Trent at 0.39%.
Dr. Vijayakumar highlighted that midcaps were showing stronger revenue and profit growth compared to large caps in Q2 results, reflecting the midcap index’s recent resilience. Large caps might regain favor if Q3 numbers indicate a revival in earnings growth, especially in sectors like telecom, automobiles, private and PSU banks, NBFCs, and capital goods. Small caps, however, could face pressure due to high valuations.
(Note: The opinions expressed in this article are those of the experts and do not necessarily represent those of any specific group. It is recommended to seek advice from a qualified financial advisor before making investment decisions.)