Benchmark stock market indices opened flat on Wednesday as investors remained cautious over the fragile ceasefire between the US and Iran and rising tensions in the Middle East.
The S&P BSE slipped 22.10 points, or 0.03%, to 75,987.60 in early trade, while the NSE Nifty50 declined 6.95 points, or 0.03%, to 23,906.75.
Investor sentiment remained subdued after Iran accused the US of violating the ceasefire by striking targets near the Strait of Hormuz, raising concerns that the three-month-long conflict may continue. Adding to worries, Israel launched more than 120 air strikes on Lebanon on Tuesday, according to Lebanese security sources. Iran has reportedly demanded an end to Israeli attacks in Lebanon as part of any broader peace agreement.
The Indian rupee also weakened slightly, opening 0.07% lower at 95.75 against the US dollar, compared to its previous close of 95.68.
Broader markets traded higher despite the cautious mood. The Nifty Midcap 100 gained 0.43%, while the Nifty Smallcap 100 rose 0.35%. India VIX edged up 0.23%.
Among sectoral indices, Nifty Metal emerged as the top gainer, rising 1.48%, while Nifty Media advanced 0.76%. Nifty Realty gained 0.50%, and Nifty Consumer Durables climbed 0.47%. Nifty Auto and Nifty PSU Bank also traded in the green. However, Nifty Oil & Gas declined 0.55%, while Nifty Private Bank slipped 0.38% and Nifty Financial Services fell 0.32%.
Among Sensex stocks, NTPC led the gainers, rising 2.97%. Eternal Ltd climbed 1.62%, while Adani Ports and Special Economic Zone gained 1.16%. Power Grid Corporation advanced 1.13%. Asian Paints and Tata Steel also traded higher.
On the losing side, HDFC Bank dropped 1.57%, Infosys declined 0.61%, Bharat Electronics slipped 0.42%, Bharti Airtel fell 0.27%, and Reliance Industries was down 0.19% in early trade.
Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “With S&P 500, Nasdaq and Nikkei setting new records and KOSPI and Taiex getting bought on declines the bull rally in these markets is showing no signs of losing steam. So long as this trend continues, Indian market will remain on the back foot weighed down by FII selling.”
“The market appears to be ignoring the concentration risk associated with the ongoing AI trade. We don’t know how long this will last and when India will turn attractive to FIIs again. This will certainly happen but the timing is unknown,” he added.
Commenting on earnings trends, Vijayakumar said, “There are some positive developments from the Q4 results. Overall the results have turned out to be better-than-expected. Midcaps have outperformed largecaps. A significant trend is that profit growth has outpaced revenue growth.”
“The sluggish revenue growth is indicative of the weak demand conditions in the economy. Fairly-valued financials have good prospects. Segments like pharmaceuticals with inelastic demand and good exports are showing great resilience since this segment will continue to do well even during tough times for the economy,” he added.