Indian stock markets opened marginally higher on Tuesday, but the chances of a year-end rally seem low as pressure from a strengthening US dollar and rising bond yields persist.
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The Indian stock markets opened marginally higher on Tuesday as traders prepared for the Christmas holiday, but the outlook for a year-end rally continues to diminish due to ongoing market pressure.
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The Nifty 50 index opened at 23,769.10 points, with a slight gain of 15.65 points or 0.07 per cent. Similarly, the BSE Sensex opened at 78,707.37 points, marking a gain of 167.20 points or 0.21 per cent. However, the markets are grappling with consistent external pressures, making a sustained rally unlikely in the near term.
According to market experts, two key factors are exerting pressure on the Indian stock markets: the strengthening US dollar and rising bond yields in the US. These factors have prompted foreign institutional investors (FIIs) to sell during rallies, dampening any immediate hopes of a bullish run. As a result, investors are advised to focus on safety over returns as the year-end approaches.
Ajay Bagga, a banking and market expert, shared his thoughts with ANI, stating, "Today, the markets are showing a slight positive open in India. However, as we approach the end of the year, investors should be cautious and not fall for miscalculated certainty. It is essential to leave room for chance in your success."
Sectoral performance was mixed at the opening, with only a few sectors registering gains. The Nifty Auto, Nifty FMCG, Nifty IT, Nifty Media, and Nifty PSU Bank indices saw positive movements, while most others faced downward pressure. Among the top gainers in the Nifty 50 list were Britannia, TCS, Tata Motors, Nestle India, and Hero Motors. On the other hand, losers included JSW Steel, IndusInd Bank, and Shriram Finance.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that while a relief rally was witnessed on Monday, the market's prospects remain restrained by both external and internal factors. "Externally, the strong dollar and high bond yields in the US will prompt FIIs to sell on rallies. Internally, the growth slowdown and earnings deceleration will also act as headwinds for the bulls," he explained. Vijayakumar further urged investors to prioritise safety in this volatile market environment.
Globally, Asian markets displayed a mixed trend. While Japan’s Nikkei 225 and South Korea’s KOSPI saw losses, other markets, including Taiwan’s Weighted Index, Hong Kong’s Hang Seng, and Indonesia’s Jakarta Composite, experienced modest gains, reflecting the overall cautious sentiment in global markets.
As the year draws to a close, market experts emphasise the importance of caution, advising investors to adjust their strategies according to the prevailing market conditions.
(With inputs from ANI)
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