Nifty and Sensex Open Flat as Foreign Investors Turn to China and Hong Kong
On Tuesday, the Indian stock market indices Nifty and Sensex opened flat as foreign investors shifted their focus to other Asian markets like China and Hong Kong. The Nifty 50 index saw a slight dip of 22.40 points or 0.09 percent, opening at 25,788 points. Similarly, the BSE Sensex opened at 84,257 with a decline of 42 points or 0.05 percent.
Experts noted that this shift in investment flows has led to a consolidation phase in the Indian markets. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, explained, “Market is likely to move into a consolidation phase in the near-term. One significant factor influencing foreign portfolios is the outperformance of Chinese stocks, reflected in the massive surge in the Hang Seng index by around 18 percent in September. This surge has been triggered by hopes of revival in the Chinese economy due to monetary and fiscal stimulus announced by Chinese authorities.”
He added that while Foreign Institutional Investors (FIIs) may continue to sell in India and move funds to better-performing markets, the Indian market is unlikely to be significantly impacted due to strong domestic investments. “Investors can use dips to buy quality large caps which are fairly valued,” he suggested.
In sectoral indices, except for Nifty FMCG, Nifty Metal, Nifty Media, and Nifty Pharma, other sectoral indices opened with gains. The top gainers on the Nifty 50 list include Tech Mahindra, Wipro, and Infosys. On the other hand, the top losers are Asian Paints, JSW Steel, Hindalco, and Tata Steel.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, commented on the market’s current structure, stating, “It is believed that the current market structure is weak and volatile for traders, as long as it continues to trade below 26000/85000. Weak sentiment is likely to persist, and below this level, the market may decline towards 25700-25500/84000-82400.”
In other Asian markets, China’s and Hong Kong’s markets are closed for a holiday after a strong rally on Monday, while Japan’s Nikkei 225 index surged by 2 percent on Tuesday.
Doubts Revealed
Nifty -: Nifty is a stock market index in India. It shows how the top 50 companies listed on the National Stock Exchange (NSE) are performing.
Sensex -: Sensex is another stock market index in India. It tracks the performance of the top 30 companies listed on the Bombay Stock Exchange (BSE).
Flat -: When the market opens ‘flat’, it means there is very little change in the stock prices compared to the previous day.
Foreign Investors -: Foreign investors are people or companies from other countries who invest money in India’s stock market.
China and Hong Kong -: China and Hong Kong are countries in Asia. Investors are putting their money in these countries’ stock markets instead of India’s.
Outperformance -: Outperformance means doing better than others. Here, it means Chinese stocks are doing better than Indian stocks.
Domestic Investments -: Domestic investments are money put into the stock market by people or companies within India.
Tech Mahindra -: Tech Mahindra is a big Indian company that provides IT services and solutions.
Wipro -: Wipro is another large Indian company that offers IT services and consulting.
Infosys -: Infosys is a major Indian company known for its IT services and consulting.
Asian Paints -: Asian Paints is a leading Indian company that makes paints and coatings.
JSW Steel -: JSW Steel is a big Indian company that produces steel.
Hindalco -: Hindalco is an Indian company that makes aluminum and copper products.
Tata Steel -: Tata Steel is one of India’s largest steel-making companies.