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Market momentum has weakened recently and the market appears to be heading for a risk-off mode.
Domestic benchmark equity indices opened flat with a negative bias tracking Asian peers that fall Thursday on the prospect of faster monetary-policy tightening to tackle inflation continues to loom over the global economic recovery. Treasury yields and the dollar retreated. In opening trades, Nifty fell 19 points or 0.11% at 17,88 while the Sensex was quoting at 60,058 up by 50 points or 0.08%.
“The market momentum has weakened recently and the market appears to be heading for a risk-off mode. Lofty valuations, downgrading of India by many foreign brokerages, warning observations from the RBI and sustained selling by FIIs have contributed to this weakness in the market,” said VK Vijayakumar, Cheif Investment Strategist at Geojit Financial Services.
Globally, fresh Covid cases in parts of Europe are concerns. There is fear that fresh Covid- related disruptions may further aggravate supply-side issues adding fuel to the inflation fire. Investors have to be careful in their stock purchases in this context. Risk-averse investors can consider partial profit booking. Market declines may be used to buy high-quality large-caps in performing sectors with earnings visibility such as IT, financials, cement, paints and autos. Investors should expect only moderate returns over the next 12 months, Vijayakumar added.
Top gainers & losers
Top gainers & losers on the Sensex.
Sectoral strand
Sectorally indices were trading mixed on the NSE with the Nifty PSU Bank index leading the pack up by 0.68%. Nifty Metal and Nifty FMCG rose 0.26% and 0.25%, respectively. While Nifty Bank and Nifty Realty index were up in the range of 0.08-0.18%.
On the downside, Nifty Auto slipped 0.21%, Nifty Pharma index lost 0.17% and Nifty IT index fell marginally by 0.05%. The volatility gauge India VIX cooled off by 3.43% to 14.46 levels.
Broader markets
The broader market continued its outperformance to benchmark indices as BSE MidCap index rose by 55 points or 0.21% at 26,416. While the BSE SmallCap index was trading at 29,358 higher by 114 points or 0.39%.
Bulls had an upper hand in the markets as 1,633 shares advanced versus 729 declining and 103 remained unchanged.
Global markets
Overseas, Asian stocks are trading mixed on Thursday, following overnight losses on Wall Street.
U.S. stocks took a dip on Wednesday as investors weighed a continuation of strong earnings reports from big-box retailers against lingering inflation concerns.