Indian equity markets opened higher on Tuesday, breaking a four-day losing streak, as cooling inflation data boosted hopes for potential interest rate cuts, while technology stocks faced selling pressure following mixed quarterly results.
The Sensex opened marginally higher at 76,335.75 compared to its previous close of 76,330.01 and is currently trading at 76,646.86, up by 316.85 points or 0.42 per cent by 9.45 am. The Nifty started the day at 23,165.90, slightly above its previous close of 23,085.95, and is now at 23,165.40, gaining 79.45 points or 0.34 per cent. The positive opening came after retail inflation eased to a four-month low of 5.22 per cent in December.
“The decline in inflation raises the possibility of an interest rate cut by the RBI in its February policy meeting, after nearly two years of unchanged rates,” said Vikas Jain, Head of Research at Reliance Securities.
The market recovery was led by Adani Enterprises, surging 3.81 per cent, followed by IndusInd Bank at 3.49 per cent, NTPC at 3.29 per cent, Tata Motors gaining 3.25 per cent, and Adani Ports rising 2.84 per cent.
However, technology stocks witnessed significant selling pressure, with HCL Tech leading the losses, down 8.84 per cent despite reporting strong quarterly results. Other IT majors also declined, with Tech Mahindra falling 1.77 per cent, Infosys dropping 1.40 per cent, and Wipro declining 1.25 per cent.
“The constant refrain from many saner voices that the broader market is overpriced and may correct sharply is now playing out,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. “Reversion to mean valuations are happening in large caps, too.”
Foreign institutional investors (FIIs) remained net sellers, offloading equities worth Rs 4,892.84 crore on January 13, while domestic institutional investors (DIIs) provided support by purchasing shares worth Rs 8,066 crore.
The Indian rupee’s weakness, which hit a record low of 86.58 against the US dollar, and crude oil prices rising above $81 per barrel continue to weigh on market sentiment. “The sensible option for retail investors is to buy beaten down quality largecaps and wait patiently,” Vijayakumar added.
Technical analysts suggest potential support levels for the market. “The 22,830 – 23,000 area is notable support from here, with some near-term time cycles coming together in the January 17 – 23rd window,” said Akshay Chinchalkar, Head of Research at Axis Securities.
Market participants are now awaiting December wholesale price index (WPI) data scheduled for release later today, while continuing to monitor global cues and corporate earnings for further direction.
