Sensex-Nifty open in negative zone as global cues remain muted

Mumbai (Maharashtra) [India], May 8 (ANI): The stock market opened on a cautious note on Wednesday, with both the Sensex and Nifty starting the day in negative territory. The subdued global handover hinted at another lackluster day for Indian markets, as investors remained cautious amid ongoing uncertainties.
The Sensex opened 192.45 points down at 73,319.40, while the Nifty started the day 68.95 points lower at 22,233.55. Among the Nifty firms, 16 witnessed advances while 34 faced declines in early trade.
Notable gainers among the Nifty companies included Coal India, BPCL, Maruti, SBI, and Reliance, while Dr. Reddy, Asian Paints, Larsen & Toubro (LT), Hindustan Unilever, and HDFC Bank were among the top losers.
Commenting on the market performance, Ajay Bagga, banking and market expert, stated, "Muted global handover is pointing to another listless day in Indian markets. Volatility index VIX is up at a 15-month high, rising more than 40 per cent over the last month."
Bagga highlighted the impact of continued Foreign Institutional Investor (FII) outflows and the lack of strong catalysts in the Indian markets, including weak IT sector outlook and provisioning overhang on lenders from the RBI.
He noted the positive performance of European markets on ECB rate cut expectations for June and increasing fund flows into China.
Bagga said, "The continued FII outflows are contributing to the subdued performance of the Indian markets. With the Fed rate cuts moving to the last quarter of the year, US bond yields are providing good returns for US money market funds which are seeing continued inflows even at lifetime high AUMs of USD 6 trillion plus. With a tepid earnings season, marked by a weak IT sector outlook and a provisioning overhang on the lenders from the RBI, strong catalysts are lacking for the Indian markets. Globally Europe is doing well on the back of ECB rate cut expectations for June."
He added, "China seems to have bottomed and fund flows into China are increasing. We are reaching a favourable risk reward tradeoff in the Indian markets on the back of the recent negative price action. A small recovery may be on the anvil in this week itself, but the June 4th decision related volatility will limit any incipient euphoria , at least till the exit polls on June 1st. Mildly positive markets on the back of huge volatility, FII selling , positive global cues are expected. Leadership is moving to FMCG this week with rural demand expected to recover this year."
In terms of Open Interest (OI) Data, the highest OI was noted at 22,500 followed by 22,600 strike prices on the call side, while on the put side, the highest OI is at 22,000 strike prices.
Technically, the trend has weakened as the index fell below the 21-day Exponential Moving Average (EMA), with a visible Head and Shoulders pattern on the hourly chart indicating a bearish formation.
Varun Aggarwal, founder and managing director, Profit Idea, said, "On the global front, Asian stocks showed mixed trends, with Japan witnessing a decline while South Korea and Australia saw gains. US stock futures remained largely unchanged. Geopolitical tensions between China and the West persisted, with the US revoking licenses allowing Huawei Technologies Co. to buy semiconductors from Qualcomm Inc. and Intel Corp."
Despite these challenges, stocks worldwide have been attempting a comeback after April's decline, driven by prospects of Federal Reserve rate cuts and solid earnings.
The Indian stock market opened on a cautious note, reflecting muted global cues and ongoing uncertainties. Investors are closely watching developments both domestically and internationally for further direction. (ANI)