Indian benchmark indices opened mildly higher on Tuesday, buoyed by strength in US markets. The BSE Sensex and Nifty 50 rose at the opening bell, continuing momentum from the previous session.
- BSE Sensex: 79,746 (+250 points, +0.31%)
- Nifty 50: 24,225 (+84.5 points, +0.35%)
Market Movers: ICICI Bank, Bharti Airtel Lead the Gains
Among the 30 Sensex stocks, ICICI Bank (up 1.17%) emerged as the top performer, followed by Bharti Airtel, Sun Pharma, Bajaj Finance, and Tata Steel. On the flip side, Asian Paints (down 1.05%), Mahindra & Mahindra, Maruti Suzuki, HDFC Bank, and IndusInd Bank were the main laggards.
On the Nifty 50, 32 out of 50 stocks were in the green. Trent (up 2.94%) led the charge, followed by BPCL, HDFC Life, Hindalco, and Bharti Airtel. The top decliners included Britannia (down 2.21%), Asian Paints, and Mahindra & Mahindra.
Sectoral Performance: Realty and Media Indices Shine
Sectoral performance was mixed, with the FMCG and Auto indices down by 0.28% and 0.18%, respectively. In contrast, the Realty index surged by 1.24%, followed by a 1.17% gain in the Media index.
The broader markets also showed strength, with the Nifty Midcap 100 rising by 0.68%, and the Nifty Smallcap 100 advancing by 0.65%.
Mixed Market Sentiment: Foreign Institutional Investors’ (FII) Impact
Investor sentiment remains cautious amid continued foreign institutional investor (FII) outflows. Many FIIs have shifted their investments from India to US and China, following Donald Trump’s victory. This trend, along with concerns over weak corporate earnings and rich valuations, is keeping investors on edge.
As of the previous session, both the BSE Sensex (up 0.01%) and Nifty 50 (down 0.03%) ended flat after a choppy day of trading.
Sectoral Index Performance:
- IT, Financials, and Banking (especially Bank Nifty, Private Bank, and PSU Bank) were among the top performers.
- The Healthcare, Metal, and Media indices all fell over 1%.
Equity Mutual Fund Inflows Reach All-Time High Despite Market Volatility
In October, equity mutual fund (MF) inflows soared to an all-time high of Rs 41,887 crore, a 22% increase month-on-month (M-o-M). This marked a new record, surpassing the previous high of Rs 40,608 crore in June. This surge in inflows came despite a sharp correction in the stock markets.
However, UBS’s head of global markets for India, Gautam Chhaochharia, warned that weak earnings amid high valuations, rather than foreign outflows, could be the real challenge for Indian stocks moving forward.
Foreign Portfolio Investors (FPI) Rules Tightened
In a bid to regulate foreign investments, India’s financial regulators, the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI), issued new guidelines. FPIs are now required to secure government approval and obtain concurrence from investee companies before acquiring equity stakes that exceed prescribed limits.
China and US Markets: A Diverging Outlook
While India faces outflows, China has seen a surge in FII interest, with Chinese stocks topping the MSCI Emerging Markets Investable Market Index (EM IMI) for the second consecutive month. This trend marks a shift in FII focus, as China has become more attractive due to its economic policies and stock market performance.
Meanwhile, US markets remained buoyant after Donald Trump’s election, driven by expectations of tax cuts, deregulation, and higher economic growth. Investors also watched closely as US inflation and industrial production data were set to be released this week.
Asian Markets Mixed Amid Cautious Sentiment
Asian markets were mixed on Tuesday, reflecting a cautious outlook as global investors await key data from the US.
- Australia’s S&P/ASX 200: -0.42%
- Japan’s Nikkei 225: +0.57%
- South Korea’s Kospi: -0.73%
- Hong Kong’s Hang Seng: -0.49%
- China’s CSI 300: +0.66%
- Shanghai Composite: -0.04%
In the US, equity markets showed mixed performance:
- Dow Jones: +0.7% (44,293)
- S&P 500: +0.1% (6,001)
- Nasdaq: Flat (19,298)
Global Commodities: Oil and Bitcoin in Focus
- Oil prices continued their decline amid expectations that Trump’s pro-drilling stance could lead to increased supply. US crude fell by 3%, while Brent crude dropped 2.5%.
- Bitcoin surged to a new record high above $87,000, driven by pro-crypto candidates in the US Congress and the prospect of a lighter regulatory environment.
Market Outlook: What Investors Are Watching
- US Consumer Price Inflation (CPI) and other economic data this week could influence market sentiment and the outlook for interest rates.
- Investors will also focus on comments from Federal Reserve Chair Jerome Powell on Thursday, which may provide further insight into the US economic trajectory.
Indian markets opened on a positive note, but investor sentiment remains cautious as foreign outflows continue and earnings growth remains under scrutiny. The evolving global landscape, including the impact of Trump’s policies, rising inflation, and shifting FII flows, will likely dictate the market’s short-term direction.Sugg
