Sensex, Nifty open flat as cautious sentiment prevails in markets

The S&P BSE Sensex was down 76.81 points to 78,598.37, while the NSE Nifty50 lost 75 points to 23,808.45.

Benchmark stock market indices opened flat on Wednesday after witnessing a major decline in the previous trading session which led to investors losing Rs 5.76 lakh in wealth.

The S&P BSE Sensex was down 76.81 points to 78,598.37, while the NSE Nifty50 lost 75 points to 23,808.45 as of 9:30 AM.

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said that a significant feature of this year’s market movements is the big variation across countries and regions.

"The US is, by far, the best performing market with 26.17% YTD returns in S&P 500. India is now underperforming with only 9.85% YTD returns in Nifty. The Euro Zone index Stoxx 50 has given only 5.14% YTD returns. The performance of the economy and expectations around earnings growth are the main factors behind this variation in performance. The US economy continues to be resilient, India is facing growth concerns and the Euro Zone is very weak. The Trump victory has added an element of high volatility to markets," said Vijayakumar.

"From the emerging market perspective, the rise in the dollar index and the sharp spike in the US 10-year bond yield to 4.42% are causes of concern. Such high yields in US bonds will facilitate more outflows from emerging markets to the US. This will continue to be a headwind for India. Investors should be cautious in investing in sectors like cement, metals and petroleum refining which are facing growth slowdown. Safety is sectors like banking, new age digital companies, hotels, pharma and IT where growth prospects are good," he added.