GIFT Nifty slips 45 points: What to expect in today's market session

Experts mentioned that fears around Trump's potential tariff policies, especially targeting China, are weighing on emerging markets like India.

by · India Today

In Short

  • GIFT Nifty signals a negative start with 45 points
  • Rising US bond yields, inflation concerns pressure global markets
  • Rupee hits record low amid foreign outflows and strong dollar

The stock markets experienced a challenging day on Tuesday, with both major indices—Sensex and Nifty—witnessing major declines. Sensex dropped over 800 points, while Nifty shed nearly 200 points, leading to a reduction in the overall market capitalisation of BSE-listed companies by Rs 5.76 lakh crore, bringing the total down to Rs 436.78 lakh crore. The sentiment on Dalal Street is cautious as various factors, both domestic and international, continue to impact investor confidence.

"The benchmark indices, Sensex and Nifty, are likely to open on a cautious note today, with GIFT Nifty signalling a potential 55-point dip for the broader market. Asian markets were trading lower on Wednesday, influenced by losses on Wall Street, where major indices closed down as investors booked profits from the recent post-election rally. US inflation data, anticipated later this week, also contributed to cautious sentiment," said Mandar Bhojane, Research Analyst, Choice Broking.

Concerns surrounding rising US bond yields and inflation fears were amplified following Donald Trump’s recent election win, which has raised questions over potential tariff policies that could affect global trade dynamics. This, coupled with China’s underwhelming stimulus measures, has led to a slump in metal stocks, with companies like NMDC and VOLTAS experiencing pressure.

Prashanth Tapse, Senior VP of Research at Mehta Equities Ltd said that fears around Trump’s potential tariff policies, especially targeting China, are weighing on emerging markets like India.

"Despite positive factors such as record Mutual Fund SIP inflows and falling oil prices, both Nifty and Bank Nifty remain bearish," Tapse added.

Traders are now focused on upcoming US inflation data, remarks from Fed Chair Jerome Powell, and quarterly results from stocks like Eicher Motors, Apollo Tyres, and Alkem.

NIFTY AND SENSEX TECHNICAL OUTLOOK

The short-term trend for Nifty remains weak, with the index now approaching a crucial support level. According to Nagaraj Shetti of HDFC Securities, if Nifty breaks below the 23,800 mark, the next downside target could be around 23,500, where the 200-day EMA level lies. The immediate resistance for Nifty is noted at 24,050.

Ajit Mishra, SVP of Research at Religare Broking, said, “Nifty’s movement has been led by weakness in banking heavyweights, dampening recovery hopes. Indicators suggest a potential test of the 200 DEMA level around 23,540, signalling that participants should adjust positions accordingly, with selective stock picking as a priority.”

India VIX, a gauge of market volatility, rose over 2% to close at 14.59 on Tuesday, indicating an increase in market fear.

GLOBAL MARKET SENTIMENT

The sentiment on Wall Street also remained subdued, with all three major indices—Dow, S&P 500, and Nasdaq—closing lower on Tuesday. Investors are awaiting the US inflation data expected this week, which may shape expectations regarding Federal Reserve rate decisions.

In Asia, markets echoed this caution. Japan’s Topix index dipped 0.3%, while Australia’s S&P/ASX 200 fell by 1.4%. Meanwhile, the dollar held firm near its recent peak against other major currencies, and Bitcoin traded just below record highs as markets brace for further moves in the wake of the US election results.

STOCKS UNDER F&O BAN

Certain stocks are in the Futures and Options (F&O) ban today due to exceeding the market-wide position limit. These include:

  1. Aditya Birla Fashion and Retail Limited (ABFRL)
  2. Granules
  3. Manappuram Finance
  4. Hindustan Copper
  5. Aarti Industries

RUPEE AND FOREIGN FLOWS

On Tuesday, the rupee hit a record low of 84.39 against the US dollar as foreign outflows continued and the dollar strengthened globally. Foreign portfolio investors were net sellers, withdrawing Rs 3,024 crore from Indian markets, while domestic institutional investors (DIIs) bought shares worth Rs 1,854 crore.