Sensex, Nifty brace for muted opening amid global downturn

Stock market today: Benchmark Nifty 50 index is poised for a tepid opening on Wednesday, mirroring the global trend as optimism wanes regarding early US interest rate cuts. The slide in global markets anticipates the release of Federal Reserve minutes and impending job data.

GIFT Nifty was observed trading at 21,681 as of 8:26 am, indicating an opening near its Tuesday close at 21,665.80 points.

"On the second trading day of 2024, Nifty and Bank Nifty experienced uneasiness marked by profit-taking, driven by a surge in COVID-19 sub-variant JN.1 cases in India. Described as a day of "volatility" on Dalal Street, the overbought technical conditions triggered panic among Nifty Bulls after it reached a new all-time high at 21,834.35," said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

“Looking ahead, the benchmark may consolidate with Nifty's support at 21,487 being a critical level, and aggressive upside targets at 22,000 from a technical perspective,” Tapse added.

Global sell-off persists, Asian shares drop

Continuing a global sell-off, Asian shares experienced a 1 per cent decline for the second consecutive session. Wall Street also faced a downturn overnight, primarily influenced by a decline in Apple shares due to demand concerns.

The awaited release of Fed minutes later in the day and crucial labor market data later in the week will provide insights into the justification of optimism over potential rate cuts.

Equities grapple with profit booking and record high challenges

Although Indian equities have displayed resilience, trading near all-time highs, they have not escaped selling pressure as they struggle to break through to fresh record levels. Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services, notes, "Markets are witnessing profit booking after two consecutive months of sharp up-move."

Analysts anticipate continued caution in the market ahead of the Fed minutes and India's manufacturing purchasing managers' index (PMI) data.

Investor activity and noteworthy stocks

Foreign institutional investors (FIIs) exhibited a net purchase of Indian shares worth  Rs 1,602 crore on Tuesday. In contrast, domestic institutional investors (DIIs) sold a net Rs 1,959 crore worth of stocks, according to exchange data.

• Rail Vikas Nigam secured a Rs 123 crore order for the redevelopment of a railway station in Kerala.
• Avenue Supermarts reported a 17.19 per cent increase in standalone revenue for the December quarter.
• Hindustan Zinc announced a 7 per cent surge in mined metal production in the December quarter.

(With Reuters inputs.)