Indian Stock Markets Begin Trading Session in Negative Territory
The Indian equity benchmarks, Nifty50 and BSE Sensex, commenced Thursday's trading session on a downward note, reflecting broader global market weakness. Both indices opened in the red, with significant declines observed in early morning trading.
Early Trading Figures Show Notable Declines
At 9:16 AM, the Nifty50 index was trading at 25,262.65, marking a decline of 80 points or 0.32%. This placed the index below the psychologically important 25,300 level. Meanwhile, the BSE Sensex stood at 82,055.85, experiencing a drop of 289 points or 0.35%.
Analysts Point to Multiple Influencing Factors
Market analysts suggest that Indian stock markets could potentially extend their recent gains, driven by several key developments. Improving sentiment surrounding the ongoing India-EU free trade agreement negotiations has provided some optimism. Additionally, anticipation building ahead of the upcoming Union Budget presentation has created a cautiously hopeful atmosphere among investors.
Domestic markets are expected to take significant cues from global market trends and the ongoing third-quarter earnings announcements from major corporations. Furthermore, reports indicating positive progress in India-US trade deal discussions may offer additional support to market sentiment in the coming sessions.
Expert Perspective on Market Dynamics
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, offered his analysis of current market conditions. "Nifty's upward movement of 300 points during the last two days should be viewed primarily as a temporary response in anticipation of the Budget scheduled for Sunday," he explained.
Dr. Vijayakumar elaborated on market mechanics, noting that bears have been covering some short positions to avoid entering the Budget period with substantial open short positions, which has contributed to the recent rally. However, he emphasized that foreign institutional investors (FIIs) have maintained their 'sell India' strategy in the short to medium term, redirecting funds to other performing markets.
"Unless the Union Budget contains significant announcements that encourage FIIs to return to Indian markets, they are likely to continue selling, potentially dragging the market downward," Dr. Vijayakumar cautioned.
Potential Positive Catalysts on the Horizon
Despite current challenges, markets retain the capacity for unexpected positive movements. Dr. Vijayakumar highlighted that certain developments could trigger market rallies. "There are circulating rumors regarding a potential sudden announcement of a US-India trade deal. Should this materialize shortly after the groundbreaking India-EU trade agreement, it would represent a substantial boost to the Indian economy and corporate earnings in FY27, likely generating a positive market response," he stated.
Global Market Context and Commodity Movements
On Wednesday, Wall Street delivered a subdued performance, with the Nasdaq ending marginally higher supported by gains in chip-related stocks, while the S&P 500 finished largely flat. Investor response remained muted following the US Federal Reserve's decision to maintain interest rates unchanged, which aligned with market expectations, while providing limited clarity regarding the timing of future rate reductions.
In commodity markets, gold continued its record-setting trajectory on Thursday, approaching the $5,600 per ounce level as investors increasingly sought safe-haven assets amid persistent geopolitical and economic uncertainties. Silver prices also advanced, nearing the $120 mark during trading sessions.
Institutional Investment Activity
On the institutional investment front, foreign portfolio investors demonstrated net buying activity in Indian equities worth Rs 480 crore on Thursday. Domestic institutional investors provided more substantial support, recording net purchases amounting to Rs 3,360 crore during the same period.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips provided by experts represent their individual opinions and do not necessarily reflect the views of any particular media organization.
