Indian equity markets began Tuesday's trading session on a flat note, showing cautious optimism despite positive signals from global markets and former US President Donald Trump's indication of reducing tariffs against India. The benchmark indices struggled for direction as investors awaited key domestic economic data and monitored global developments.
Market Opening and Performance
The BSE Sensex opened marginally higher at 79,441.95, showing a modest gain of just 12.53 points from the previous close. Meanwhile, the NSE Nifty50 started at 24,135.85, recording a slight increase of 6.75 points in early trading hours. The minimal movements reflected the market's cautious stance amid mixed global cues and domestic uncertainties.
Market breadth showed a balanced picture with 1,496 stocks advancing against 1,372 declining, indicating neither strong bullish nor bearish dominance. The trading volume remained healthy with over 55.88 million shares traded on the BSE and 237.92 million on the NSE, suggesting active participation despite the flat opening.
Trump's Tariff Reduction Signals
The most significant development influencing market sentiment came from former US President Donald Trump, who indicated his willingness to reduce tariffs against India if re-elected. This announcement comes as a positive development for Indian exporters and companies with significant US exposure, particularly in the IT, pharmaceuticals, and manufacturing sectors.
Trump's statement marks a potential shift in US trade policy toward India, which could lead to improved bilateral trade relations and reduced compliance burdens for Indian companies exporting to the United States. Market analysts believe this development could provide substantial support to Indian markets in the medium to long term.
Sectoral Performance and Key Stocks
Sectoral indices displayed mixed trends during the early trading session. The Nifty Realty index emerged as the top performer, gaining 0.84 percent and continuing its recent strong momentum. Other sectors showing positive movement included IT and FMCG, while banking and auto stocks showed some pressure.
Among individual stocks, Adani Ports, HCL Technologies, and Tata Motors were among the notable gainers in the Nifty pack. Conversely, Hero MotoCorp, Bajaj Auto, and SBI Life Insurance faced some selling pressure. The mixed performance across sectors indicated selective buying rather than broad-based market participation.
The volatility index, India VIX, showed a marginal increase of 0.86 percent to 13.47, suggesting some caution among traders regarding near-term market movements. Options data indicated that traders are expecting the Nifty to trade in a range between 24,000 and 24,300 in the immediate term.
Global Market Context
Global markets provided positive cues for Indian equities, with most Asian markets trading higher. The US markets had closed positively in overnight trading, supported by expectations of potential interest rate cuts and stronger corporate earnings. European markets had also ended in the green, creating a favorable environment for risk assets.
However, domestic investors remained cautious ahead of the release of key economic data, including inflation numbers and industrial production figures. The market is also watching for developments in the monsoon progress and its impact on rural demand and agricultural production.
Foreign institutional investors (FIIs) showed mixed activity in the previous session, while domestic institutional investors (DIIs) continued to provide support to the markets. The currency market saw the Indian rupee trading range-bound against the US dollar, providing stability to import-oriented sectors.
Market Outlook and Analysis
Market experts suggest that the flat opening reflects the market's wait-and-watch approach ahead of important domestic and global events. The upcoming US inflation data and Federal Reserve commentary will be crucial in determining the future direction of global markets, including India.
Technical analysts indicate that the Nifty needs to sustain above the 24,150 level to witness fresh buying momentum toward the 24,300-24,400 zone. On the downside, support is seen at the 24,000 and 23,850 levels. The market structure remains positive, but some consolidation is expected after the recent rally.
Investors are advised to focus on quality stocks with strong fundamentals and reasonable valuations. Sectors like IT, pharmaceuticals, and select manufacturing companies could benefit from improved US-India trade relations if Trump's tariff reduction indications materialize into concrete policy actions.
