Indian stock markets closed flat on Tuesday, pausing after a strong two-day rally that had boosted indices by nearly 4%.
The Sensex ended the session at 80,004.06 points, slipping 105.79 points or 0.13%, while the Nifty settled at 24,194.50 points, down 27.40 points or 0.11%. Despite the gains from the recent uptrend, the Sensex remains about 6,000 points below its record high of 85,978 points.
The recent rally helped recoup some earlier losses driven by fund outflows, weaker-than-expected Q2 corporate earnings, and stubbornly high inflation. However, experts caution that the gains may be short-lived.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said that the rally is unlikely to sustain amid persistent earnings concerns. He added, “The impact of short-covering and positive sentiment from the Maharashtra election results will be temporary. A sustained rally can only occur when signs of an earnings revival emerge, which is still some time away.”
Similarly, Shrikant Chouhan, Head of Equity Research at Kotak Securities, observed a bullish intraday market sentiment but flagged temporary overbought conditions that could limit activity in the near term.
Meanwhile, foreign portfolio investors (FPIs) are poised to end November as net sellers in Indian stock markets for the second consecutive month, following a four-month buying streak until September.
According to data from the National Securities Depository Limited (NSDL), FPIs have sold stocks worth Rs 25,460 crore in November so far, though the pace of outflows has slowed in recent days.
Looking ahead to December, the Reserve Bank of India’s (RBI) bi-monthly Monetary Policy Committee (MPC) meeting will be closely monitored for fresh cues. Persistent food inflation continues to delay potential rate cuts by the central bank.
The GDP figures, set to be released on November 29, will provide insights into the economy’s health. In the previous quarter, India’s GDP grew by 6.7%, falling short of the RBI’s 7.1% forecast. Persistently high food inflation is also delaying potential rate cuts by the central bank.
(ani)