In the early trading session on Tuesday, benchmark equity indices exhibited a decline, despite a solid commencement. This retreat was primarily driven by investor prudence, as a notable segment chose to adopt a more cautious stance. This guarded approach can be attributed to the imminent arrival of significant market-moving events – namely, the Reserve Bank of India’s (RBI) forthcoming monetary policy announcement and the impending release of United States inflation data – both scheduled to occur later within the week.
Persistent Foreign Fund Outflows Hamper Domestic Market Performance
The performance of domestic markets has been adversely affected by an ongoing trend of continuous foreign fund outflows. This phenomenon, marked by the consistent withdrawal of investment capital by foreign investors, has cast a shadow over the market landscape, dampening its overall performance.
At the commencement of the trading session, the 30-share BSE Sensex experienced a marginal decline of 5.42 points, settling at a value of 65,948.06. In contrast, the NSE Nifty displayed a modest ascent of 2.40 points, reaching a level of 19,599.70.
Subsequently, as the trading session progressed, the BSE benchmark index encountered a more substantial contraction, registering a decline of 93.4 points to reach a level of 65,860.08. Concurrently, the Nifty index also faced a dip, sliding by 21.05 points to achieve a mark of 19,576.25.
Among the constituents of the Sensex index, several prominent entities faced a decline in their respective market valuations. Notable names such as Power Grid, Mahindra & Mahindra, Bharti Airtel, Nestle, HDFC Bank, Infosys, JSW Steel, Tata Consultancy Services, ITC, and Hindustan Unilever emerged as prominent underperformers during the trading session.
Across the Asian markets, a mixed pattern emerged in trading activities, with varied outcomes evident among key financial centers. Notable trends include:
Seoul and Hong Kong: These markets displayed a downward trajectory, with trading activities reflecting a decline in valuations. Investors in these regions encountered a more cautious market sentiment.
Tokyo and Shanghai: On the contrary, both Tokyo and Shanghai exhibited positive movement, with their respective market indices reflecting gains. Participants in these markets witnessed a more optimistic trading environment, characterized by increased investor confidence.
The United States (US) equity markets concluded the trading session on Monday with gains, thereby concluding the day in positive territory. This upward movement in the market indices underscores a favorable trading day, marked by increased investor participation and optimistic market sentiment.
The global oil benchmark, Brent crude, demonstrated a modest increase of 0.18 percent, reaching a value of USD 85.49 per barrel. This price movement indicates a slight uptick in the valuation of Brent crude oil within the global commodities market.
On Monday, Foreign Institutional Investors (FIIs) divested equities with a total value of ₹1,892.77 crore, as reported by exchange data. This denotes a net outflow of funds from the Indian equity market by foreign investors during the specified trading session.
“Amidst the ongoing influence of global cues, market trends are poised to be guided by two pivotal catalysts – the Reserve Bank of India’s forthcoming monetary policy announcement and the release of US inflation data on Thursday,” remarked Prashanth Tapse, Senior Vice President of Research at Mehta Equities Ltd.
On Monday, the BSE benchmark index exhibited a notable ascent, gaining 232.23 points or 0.35 percent, ultimately closing at 65,953.48. This positive movement in the index reflects a favorable trading session marked by increased investor participation and market optimism.
Similarly, the Nifty index also experienced an upward trajectory, advancing by 80.30 points or 0.41 percent, culminating at a closing value of 19,597.30. This commendable performance further underscores the overall positive sentiment observed in the market during the trading session.