After struggling in the previous day’s trade, Indian stocks on Tuesday (January 14) opened higher. Earlier, the Nifty was up 0.48 percent or 110.25 points at 23,196.2, while the 30-share Sensex was up 0.45 percent or 343.1 points at 76,673.11. Broader markets, on the other hand, outperformed the headline indices, with the Nifty Midcap 100 index up 1.7 per cent in early trade.
By sector, amid broad buying, the IT and FMCG indices are trading in the red, with the IT index leading the loss – down more than one percent.
Investors are maintaining a cautious approach ahead of US inflation reports and the Federal Reserve meeting later this month. Continued FII selling and rising crude oil prices are also putting pressure on the market.
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services said, “The constant rejection of many wise words that the broader market is overvalued and may correct sharply is now playing out. The reversal means valuation is happening in large caps, too.”
A strengthening dollar, 10-year US bond yields rising above 4.7%, uncertainty about Trump’s actions after January 20, India’s economic slowdown and low corporate earnings, a strong surge in the greenback…..it’s all coming together to cause this market correction.
Now it seems that the market is slightly oversold and this tends to bounce back in the near term. But that habit, if played, is unlikely to continue, added Vijaykumar.
A technical perspective
Anand James, Chief Market Strategist, Geojit Financial Services on the Nifty outlook said, “23000 region has prompted the bulls to rally again. However, while this was expected, there is little else to suggest that this is more than just a cat bounce.” otherwise, a direct rise above 23370 could trigger a move to 23640.”
On the day, despite the ever-present threat of “rally selling” mode, we may play for upswings as long as we are above 23176, he added.
Asian markets
In Tuesday’s trading, Asian stocks traded mixed, with Chinese stocks gaining amid reports of a gradual increase in US tariffs under Trump. The main MSCI Asia ex Japan traded index was up 0.93 percent at 554.63. In the meantime. Japan’s Nikkei fell as much as 1.76 percent, putting pressure on other regional shares.
