Indian stock markets opened nearly flat with slight positive movement as experts express concerns over the sustainability of FIIs' buying due to macroeconomic factors like a strengthening US dollar. Market movements are expected to remain moderate until major corporate earnings reports.
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The Indian stock markets opened nearly flat on Friday, continuing their movement towards the positive, as other Asian markets showed signs of strength.
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The Nifty 50 index opened at 24,196.40 points, registering a modest gain of 7.75 points or 0.03 per cent, while the Sensex opened at 80,072.99 points, up by 129.28 points or 0.16 per cent.
Market analysts have pointed out that the rally on Thursday was largely driven by Foreign Institutional Investors (FIIs) buying into the market. However, with the current macroeconomic conditions, particularly a strengthening US dollar, sustaining such FIIs' investments could prove challenging. Experts suggest that the markets are likely to experience moderate movement until major corporate earnings reports are released.
"The market's ability to surprise was evident in yesterday's unexpected rally of 445 points in the Nifty. Large-cap stocks outperforming small-cap stocks is a positive signal that may persist. However, it’s still too early to ascertain whether FIIs will continue their buying spree. With the dollar index at 109.25 and the US 10-year yield at 4.56 per cent, the broader macroeconomic situation does not favour sustained FII investments. A rise in deposit growth could bode well for banking stocks, which are currently well-priced," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Sector-wise, Nifty Media led the gains with a 1.4 per cent rise, while shares in the Auto, IT, and Healthcare sectors came under pressure. Overall, other sectors registered positive movements.
At the time of reporting, 29 of the Nifty 50 stocks had opened with gains, while 21 stocks were in the red. ONGC, HCLTech, SBI, Trent, and Mahindra & Mahindra were among the top gainers, whereas Hero MotoCorp, Infosys, TCS, Asian Paints, and Wipro were the leading losers.
"Nifty had its best performance since November 22 and managed to close above the November 19 gap-down level of 24,150, which was a significant boost for tactical bulls. The break of the 200-day average in mid-December turned out to be a bear trap. That said, sustained momentum will be crucial, with immediate resistance at 24,250 and critical resistance at 24,306. On the downside, supports are at 24,000, with an extension at 23,830. Historically, Friday has been the best day of the week for the Nifty, with a 60 per cent win-rate and an average gain of 0.2 per cent," said Akshay Chinchalkar, Head of Research at Axis Securities.
Meanwhile, in other Asian markets, Japan’s market remained closed for the New Year holiday, but other regional markets saw positive movement. Hong Kong's Hang Seng index surged by more than 1 per cent, Taiwan’s Weighted index gained 0.96 per cent, South Korea’s KOSPI rose by 2 per cent, while China’s Shanghai Composite index showed a decline at the time of reporting.
(With inputs from ANI)
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