Indian equity markets started Tuesday on a steady note, with both benchmark indices posting marginal gains. The Sensex opened up 147.29 points at 81,937.41 at 9:38 am, while the Nifty 50 inched up by 41.70 points to 25,119.35, reclaiming the 25,000 level.
According to market data, the early uptick was led by banking and metal stocks, supported by positive cues from overseas markets, despite persisting geopolitical and economic uncertainties.
Banking and market expert Ajay Bagga said Indian markets were moving in tandem with global trends, with PSU bank indices touching record levels.
“Earnings, which begin on October 9, will set the tone for the markets. Indian markets have underperformed the MSCI Emerging Markets index substantially. A catch-up will come eventually, but for now, foreign portfolio investors remain bearish, and the surge in primary market issuances creates a liquidity drag for secondary markets,” he explained.
Bagga further added, “Markets abhor uncertainty, but they’ve mastered Washington theatre.” He noted that while the U.S. government shutdown entered its sixth day, American stock markets continued to hit record highs.
Early sectoral trends showed strength in banking and IT stocks, while pharma and metal shares remained cautious amid global cues. Realty and consumer discretionary stocks were under some pressure.
In the IPO space, the Tata Capital IPO entered its second day, and the LG Electronics IPO opened for subscription on Tuesday. Tata Capital was subscribed about 40% on day one, Monday.
Precious metals and cryptocurrencies also drew investor attention. “Gold and silver continue their surge, with gold crossing USD 4,000 and silver at USD 48. Cryptocurrencies are rising as well, with Bitcoin doubling over the last year to USD 125,000,” Bagga noted.
Gold prices maintained an upward trajectory amid political and economic unease. Manav Modi, Analyst – Precious Metals Research at Motilal Oswal Financial Services Ltd, said, “Gold prices rose to an all-time high, extending gains to a third session, supported by U.S. economic and political uncertainties and expectations of further interest rate cuts by the Federal Reserve.”
Global developments also influenced investor sentiment. Manav explained that while the White House eased earlier claims about government layoffs due to the shutdown, it warned that prolonged gridlock could lead to job losses. In currency markets, the Japanese yen tumbled sharply against the U.S. dollar after fiscal dove Sanae Takaichi was elected to lead the ruling party, signaling policy continuity.
“Kansas City Fed Bank President Jeff Schmid signaled he is disinclined to cut interest rates further, arguing that as the Fed navigates between the twin risks of overly tight and overly easy policy, it should stay focused on the danger of too-high inflation,” Manav noted. However, market projections still price in additional rate cuts in October and December, keeping investor focus on upcoming U.S. Federal Open Market Committee minutes and Federal Reserve Chair’s remarks.
-ANI