Monday, December 11, 2023

Indian Stock Markets Open in the Green, Rebounding from Previous Session’s Lull

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Indian stock benchmarks initiated Tuesday’s trade on a positive note, rebounding from a subdued session on Monday. The green start was attributed to solid overnight gains in the US markets, prompting a boost in investor confidence.

At the opening bell, both the Sensex and Nifty indices in India exhibited around a 0.5 percent increase from their Monday closing levels. Notably, all sectoral indices, except Nifty FMCG, showed significant gains, with Nifty Metal emerging as the top mover in the morning.

Monday’s market activity saw a tepid start to the week, with marginal changes by the closing hours. Despite this, market experts continue to express a bullish sentiment, advocating a “buy on dips” strategy. Ajit Mishra, SVP – Technical Research at Religare Broking, emphasized, “Amid all, we reiterate our bullish view on the index and suggest continuing with the ‘buy on dips’ approach. Traders should stick with the outperforming sectors and utilize this phase to gradually add quality names.”

Looking ahead, investors are keenly awaiting the release of the US Federal Open Market Committee minutes from its last meeting, scheduled for Tuesday. The minutes are anticipated to provide insights into the future monetary policy actions of the US central bank, influencing market direction.

In addition to global cues, the Indian stock exchanges are set to witness several Initial Public Offerings (IPOs) for subscription this week. Notable companies, including Tata Technologies, Indian Renewable Energy Development Agency (IREDA), Fedbank Financial Services, Flair Writing Industries, and Gandhar Oil Refinery, are among those opening their IPOs for subscription.

Vinod Nair, Head of Research at Geojit Financial Services, noted the impact of recent developments on the market. He mentioned, “While the recent softening of inflation in the US & India and the negative trend of crude are expected to help the view on global equity and India in the short term. In that context, the ease in FIIs selling is helping the domestic markets but continues to consolidate primarily due to India’s premium valuation relative to global peers.”

Nair also pointed out the sectoral dynamics, highlighting the benefit observed in the IT sector amid the current market conditions. However, he cautioned about the sector’s high valuation compared to long-term history, advising a cautious approach in the medium term.

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