Indian equity markets remained volatile on Wednesday after extending gains for a second consecutive session in the previous trade, supported by strength in banking, IT and capital goods stocks. The weak start extended into early trade, reflecting caution among investors despite positive global cues.
The BSE benchmark opened the session above 83,400, slipping almost 30 points, and the NSE Nifty50 started the day around 25,700, inching down 15 points, as of 9:15 AM.
Notably, around 9:06 AM in the pre-open session, the Sensex was trading at 83,669.96, up 219.00 points or 0.26 per cent, while the Nifty50 stood at 25,739.45, higher by 14.05 points or 0.05 per cent, indicating a mildly firm opening.
IT and Services Stocks Drag Markets
Market experts indicated that volatility in IT counters could persist, driven by sector-specific developments. “The volatility in IT stocks may continue, in response to incoming news relating to the sector. Overall, IT stocks may remain weak since uncertainty surrounding the sector is huge and large institutional investors are unlikely to invest big time in IT stocks, unless valuations become compelling,” VK Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.
He further noted that investors may rotate funds away from IT and towards sectors with clearer earnings prospects. “There can be churns away from IT towards other sectors like banking and financials, automobiles, telecom, pharmaceuticals etc where there is good earnings visibility,” he added.
Global Cues and Institutional Flows
Asian markets presented a mixed picture. Japan’s Nikkei 225 index was trading over 1 per cent higher. However, markets in China, Hong Kong and South Korea remained shut due to Lunar New Year holidays.
In the US, equities ended higher overnight on Tuesday, providing some support to global sentiment.
Institutional activity remained positive in the previous session. According to exchange data, foreign institutional investors (FIIs) were net buyers to the tune of Rs 995.21 crore on Tuesday. Domestic institutional investors (DIIs) also purchased equities worth Rs 187.04 crore.
Meanwhile, Brent crude, the global oil benchmark, edged up 0.22 per cent to $67.59 per barrel.
Benchmarks Log Second Straight Day Of Gains
On Tuesday, the Sensex rose 173.81 points, or 0.21 per cent, to settle at 83,450.96. The index moved in a relatively tight range, touching a high of 83,598 and a low of 82,987.43 during the session.
The Nifty advanced 42.65 points, or 0.17 per cent, to close at 25,725.40, reflecting a measured recovery despite mixed global cues.