Stock market opens in red, sees subdued start; Surging inflation signals challenges for investors

The stock market opened on a subdued note on Friday, with the Sensex and Nifty both experiencing a downturn as they began the trading day

Mumbai: The stock market opened on a subdued note on Friday, with the Sensex and Nifty both experiencing a downturn as they began the trading day.

The market was initially seen flat in the red before opening and then fluctuated in the negative territory.

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The Sensex observed a significant downfall, losing 302.47 points at the opening, with the index starting the day at 66,100.58. Simultaneously, the Nifty also took a dip of 72.90 points, opening at 19,718.90.

At the time of market opening, only 6 Nifty-listed companies showed advances, while 44 experienced declines.
Among the top gainers in the Nifty firms were HCL Technology, Hero Motocorp, SBI Life, Maruti, and TCS. In contrast, the top losers included Infosys, Axis Bank, Wipro, Tech Mahindra, and SBI.

The latest data on India’s Consumer Price Index (CPI) Year-on-Year (YoY) for September was released. The actual figure came in at 5.02 per cent, down from the previous 6.83 per cent, and slightly below the estimated 5.40 per cent.

This drop in inflation was seen as a positive sign for the Indian economy, potentially indicating a pause in rate hikes and the start of an interest rate cycle moving downward.

Such a scenario could lead to the rise of stocks associated with consumption stories. Investors and analysts focused on sectors like realty, infrastructure, and consumer durables.

The opening of Nifty on the lower side was attributed to subdued results by IT companies, although these results were not considered exceptionally negative.

Varun Aggarwal, founder and managing director, Profit Idea, said, “Nifty is expected to open on the lower side due to subdued results by IT companies. This dip is good for the medium term as results are not that bad but market expectations were quite high. Overall EPS of Nifty companies is going up, Indian markets are looking good on every dip”.

Aggarwal added, “One must not panic on fall or consolidation. Overall strength of most mid and small-cap companies look very good along with nifty mid-small cap ratio”.

The overall earnings per share (EPS) of Nifty-listed companies showed an upward trend, indicating a positive outlook for the Indian markets. Investors were urged not to panic during market falls or consolidations.

The strength of many mid and small-cap companies appeared robust, as indicated by the Nifty mid-small cap ratio.

“Open Interest (OI) data has a strong put base building up at 19500 levels. Range remains between 19500-20000 levels. The market will take directions as per earning. Bias remains bullish with risk-defined strategies. The focus remains on Banks, FMCG, IT, Metals, and Petrochemical stocks”, Aggarwal said.

Open Interest (OI) data showed a strong put base building up at the 19,500 levels, with the range expected to remain between 19,500 and 20,000 levels.

The market’s future direction was predicted to depend on earnings data.

The overall bias in the market remained bullish, and risk-defined strategies were recommended. Investors’ focus was directed toward banks, FMCG, IT, metals, and petrochemical stocks, as these sectors were expected to offer potential opportunities in the trading day ahead.