The Indian stock market began the day on a strong note on Wednesday, March 5, as the Sensex surged 358.34 points, or 0.49%, to trade at 73,348.27, and the Nifty gained 106.40 points, or 0.48%, standing at 22,189.05 at 9:31 AM.
The positive market performance came despite mixed global cues, as strong buying was observed in auto, IT, and PSU bank sectors.
The Nifty Bank index was up by 147.80 points, or 0.31%, at 48,393, while the Nifty Midcap 100 and Smallcap 100 indices also posted gains of 0.69% and 0.99%, respectively.
Market Sentiment Amid Global Uncertainty
Market experts point out that despite the positive opening, the market remains cautious due to ongoing global concerns, especially related to the impact of tariff policies and trade tensions, particularly between the US and other economies.
Prashanth Tapse, Senior Vice President of Research at Mehta Equities, suggested that the market is navigating through pessimism stemming from concerns about US inflation, an economic slowdown, and the impact of potential tariff changes from former US President Trump’s policies.
Tapse further warned that if the Nifty dips below the 22,000 mark on a closing basis, the next significant support level could be around 21,281.
Sectoral Performance: Auto, IT, & PSU Banks Lead Gains
The early market movements showed that buying interest was most prominent in the auto, IT, and PSU bank sectors.
Stocks such as HCL Technologies, M&M, PowerGrid, Tech Mahindra, Tata Motors, Tata Steel, Zomato, and ICICI Bank were among the top gainers on the Sensex.
However, on the flip side, stocks such as Bajaj Finance, Bajaj Finserv, UltraTech Cement, and HDFC Bank emerged as the top losers during the session.
This mixed sectoral performance highlighted the ongoing volatility in the markets, as investors continue to assess global and domestic factors influencing market sentiment.
FII & DII Activity: Mixed Flow of Funds
Foreign Institutional Investors (FIIs) extended their selling spree, offloading equities worth Rs 3,405.82 crore on March 4, continuing their cautious stance.
In contrast, Domestic Institutional Investors (DIIs) remained active buyers, purchasing equities worth Rs 4,851.43 crore on the same day.
The contrasting movements in FII and DII behaviour indicate the ongoing market volatility, with domestic investors still showing confidence in the market, even as foreign investors pull back.
In the global arena, US markets ended the previous session on a negative note.
The Dow Jones dropped by 1.55%, closing at 42,520.99, while the S&P 500 lost 1.22% to settle at 5,778.15, and the Nasdaq declined by 0.35%, ending at 18,285.16.
This weakness in US markets was attributed to concerns over inflation, interest rates, and economic growth.
On the other hand, Asian markets displayed a more positive trend, with indices in Bangkok, China, Japan, Seoul, Jakarta, and Hong Kong all trading in the green, providing some support to Indian market sentiment.
Outlook & Strategy For Traders
Given the ongoing volatility and mixed global cues, market experts suggest that traders exercise caution and implement strict stop-loss strategies.
They advised against holding overnight positions, given the unpredictable nature of the current market. With concerns over US inflation and global trade tensions, traders should remain alert to any shifts in sentiment that could further influence the market.
In conclusion, while the stock market opened on a positive note, the current environment of heightened uncertainty, global tensions, and economic slowdown concerns calls for a balanced approach.
Investors and traders should closely monitor market movements and adjust their strategies accordingly to stay prepared for any potential shifts in market direction.
Also Read: Stock Market Reacts Positively To Strong GDP Growth Data
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