The global equity markets took a hit on Wednesday, with the Sensex and Nifty both opening lower. The selloff was triggered by strong US economic data that raised concerns about delayed interest rate cuts by the Federal Reserve. The US 10-year bond yield spiked to 4.67 per cent on better-than-expected jobs numbers and indications of a strong services sector, leading to speculation that the Fed may hold rates in January. This news prompted a decline in the Indian equity markets.
Foreign institutional investors (FIIs) remained net sellers, while domestic institutional investors bought shares. Healthcare and energy stocks showed strength in early trade, with Dr. Reddy’s Laboratories leading the gainers. On the other hand, Trent led the losses.
The oil and gas sector remained in focus as crude oil prices rose towards $75 per barrel, approaching three-month highs. Gold prices held steady near $2,650 an ounce as traders balanced reduced expectations for aggressive US rate cuts against growing haven demand.
Technical analysts suggest caution in the current market environment, with a focus on the Nifty’s performance. Market participants are closely watching the US Federal Reserve’s upcoming minutes of meeting release for further insights.
Looking ahead, investors can consider buying large caps in financials, IT, pharmaceuticals, and select autos. Additionally, several stocks will be added to NSE F&O from January 31, and IT stocks will be in focus as TCS is set to announce its quarterly results.
Overall, the market is facing uncertainty due to global cues, and investors are advised to stay informed and exercise caution when making investment decisions.
