Indian markets still in consolidation phase, open flat with marginal gains

Investors appeared cautious but optimistic, with global developments and upcoming domestic policy decisions influencing market sentiment.

The Nifty 50 index opened at 24,560.45, gaining 17.95 points or 0.07 per cent. Similarly, the BSE Sensex also started flat, rising by 40.14 points to open at 80,777.65, a gain of 0.05 per cent.

Market experts believe that the cautious momentum in Indian equities is a reflection of global cues and profit-booking by domestic promoters.

Ajay Bagga, Banking and Market Expert, told ANI, "Hopes are rising for announcement of trade deals and for a Trump-Xi call later this week which could set the stage for some US-China detente on trade and tariffs."

He added that the US markets have stayed resilient, rising for the second straight session despite concerns around tariffs, as retail investors continue to buy on dips.

Bagga pointed out that Indian markets are also responding to mixed signals. "India has seen over USD 5 billion in sales by promoters taking money off the table, which is a bit sobering for market sentiment. However, in a USD 5 trillion market, this is small change in the overall perspective," he said.

Foreign Portfolio Investor (FPI) activity has also remained weak. FPI numbers have been negative for the first two days of the week due to block deals, which remain a headwind for the markets. However, the anticipation of a rate cut by the Reserve Bank of India (RBI) on Friday is lending support to the bullish sentiment.

"India's attractiveness as a strong macro with an easing monetary bias, with RBI expected to cut rates on Friday once more, stays a strong factor," Bagga said.

In the broader market, indices were trading positive. The Nifty 100 gained 0.18 per cent, Nifty Midcap rose by 0.25 per cent, and Nifty Smallcap advanced by 0.29 per cent. Meanwhile, market volatility declined as the India VIX index dropped by 1.54 per cent.

Sector-wise, all sectors on the NSE opened with gains except Nifty Consumer Durables, which saw a marginal decline. Nifty Auto gained 0.32 per cent, Nifty FMCG rose by 0.23 per cent, and Nifty IT was up by 0.19 per cent.

Nifty Media and Nifty Pharma each gained 0.25 per cent and 0.26 per cent respectively. Nifty Metal was flat but ended slightly higher with a gain of 0.5 per cent.

With global cues remaining mixed and RBI's policy announcement around the corner, markets may continue this range-bound movement in the coming sessions. (ANI)