Indian Stock Market Set for a Tepid Start Amid Global Cues

Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open lower today following weak signals from global markets. Early trends from the GIFT Nifty suggest a negative start with trading around the 24,410 level, indicating a discount of almost 40 points from the previous Nifty futures close.

On Tuesday, the domestic markets saw a slight decline after the Union Budget 2024 was presented. The Sensex fell 73.04 points, or 0.09%, finishing at 80,429.04, while the Nifty 50 settled down 30.20 points, or 0.12%, at 24,479.05.

Technical analysts noted that a small negative candle was formed on the Nifty 50 chart, which might signal a possible rebound. Nagaraj Shetti, a Senior Technical Research Analyst at HDFC Securities, commented on a bullish hammer pattern emerging in the chart. This could indicate a potential comeback from lower levels, although the short-term trend remains volatile.

Despite a negative outlook, Shetti predicted that if Nifty moves above the 24,650 – 24,700 zone, it could pave the way for further gains towards the 24,850 – 24,900 levels.

Rupak De, a Senior Technical Analyst at LKP Securities, mentioned that Nifty is currently facing immediate support at 24,400. The presence of heavy call writing at 24,500 suggests ongoing selling pressure until the index decisively surpasses that threshold.

In the Bank Nifty sector, a decline of 502.10 points, or 0.96%, was observed on Tuesday, which closed at 51,778.30. Analysts pointed out that the index slipped below its 21-day exponential moving average, indicating a weakening trend.

Looking ahead, the market will take fresh cues from upcoming corporate earnings. Major companies such as Axis Bank, Bajaj Finserv, Federal Bank, Jindal Steel, Larsen & Toubro, and SBI Life are expected to announce their Q1 performance today.

In global markets, U.S. indices closed marginally lower, reflecting mixed earnings reports. The S&P 500, Dow Jones, and NASDAQ each slipped by about 0.1 to 0.2 percent.

Foreign institutional investors (FIIs) were net sellers in the cash market, offloading shares worth ₹2,975.31 crore. In contrast, domestic institutional investors (DIIs) were net buyers, acquiring stocks for ₹1,418.82 crore.

In the derivatives segment, FIIs continued to trim exposure, leading to a drop in their long-short ratio in index futures. Retail investors also adjusted their positions, reducing short bets.

This week, the market is expected to observe significant option activity that could provide hints about future trends. Recent IPOs, such as Kataria Industries and Macobs Technologies, are also generating buzz, indicating a potentially robust debut for Kataria.