Indian equity benchmarks kicked off the final trading session of the year on a cautiously optimistic note, registering marginal gains in early trade on Tuesday. The subdued investor mood, influenced by global factors and year-end portfolio adjustments, kept significant moves in check.
Market Opens with Modest Gains
The S&P BSE Sensex opened 71.15 points higher at 72,293.31, showing a slight uptick of 0.10%. Meanwhile, the broader Nifty 50 index began the day at 21,763.95, gaining 28.40 points or 0.13%. This muted opening followed a volatile session on Monday, where the indices had closed with minor losses after recovering from a sharp intraday decline.
Trading activity was notably thin, a common characteristic of the year-end period, as many institutional investors and fund managers refrain from making large bets. The market breadth was mixed, indicating a lack of strong directional conviction among participants.
Sectoral Performance and Key Stocks
The early trade saw a divergent performance across different sectors. Banking and financial stocks provided some support to the indices. However, selling pressure was evident in the information technology (IT) and metal sectors, limiting the overall upside.
Among the heavyweight constituents of the Nifty, HDFC Bank, ICICI Bank, and Axis Bank were among the top gainers, contributing positively to the index. On the flip side, major IT companies like Infosys and TCS traded with a negative bias, reflecting cautious sentiment towards the sector.
The mid-cap and small-cap indices also mirrored the tentative trend of their large-cap counterparts, trading in a narrow range with minimal changes.
Global Cues and Investor Sentiment
The domestic market's tepid opening was set against a backdrop of mixed signals from global markets. While most Asian markets traded with modest gains, the overall mood remained cautious. Investors globally are assessing the trajectory of interest rates and economic growth for the coming year.
Analysts pointed out that the lack of fresh positive triggers domestically, combined with the year-end lull, is leading to consolidation in the markets. Volatility is expected to remain elevated due to the expiry of monthly derivatives contracts and the approaching holiday season.
Foreign Institutional Investors (FIIs) continued to exhibit a net selling stance in the cash market, which has been a persistent overhang on market sentiment in recent weeks. Their activity will be closely watched in the new year for a change in trend.
As the trading session for 2023 concludes, market participants are looking ahead to the new year, focusing on corporate earnings for the December quarter, Union Budget expectations, and global macroeconomic data for further direction.
