Markets opened cautiously on Tuesday morning, with the Nifty 50 starting at 25,209.00, slightly above its previous close of 25,202.35. By 10:02 AM, it was trading at 25,141.95, down 60.40 points or 0.24%. The Sensex opened at 82,147.37, compared to its previous close of 82,159.97, and was at 82,002.05, down 157.92 points or 0.19%. This decline is attributed to ongoing selling by foreign institutional investors and increased volatility ahead of the weekly derivative expiry.
Analysts are closely monitoring the Nifty index, which is nearing crucial support levels between 25,100 and 25,150. “The Nifty is poised for heightened volatility today due to the expiry of weekly derivative contracts. India VIX has been inching higher, indicating growing caution in the market,” stated Hariprasad K, SEBI-registered Research Analyst and Founder of Livelong Wealth. He added that maintaining levels above these support points could provide short-term relief, while a breach might lead to greater volatility.
Foreign institutional investors (FIIs) continued their selling trend, offloading equities worth ₹2,910 crore on September 22, breaking a two-day buying streak. This ongoing pattern of FII selling has affected market performance since September 2024. “The primary pressure on the market since the September 2024 peak is attributed to continuous FII selling, which is driven by high valuations in India compared to more attractive valuations globally,” explained Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
Sectorally, automobile stocks performed well, with Maruti Suzuki increasing by 2.15% to ₹16,156. Eicher Motors gained 1.37% to ₹7,041, while Mahindra & Mahindra rose by 0.97% to ₹3,619.40. Bajaj Finance also saw an uptick of 1.18% to ₹1,018.35, and Adani Enterprises added 1.35%, reaching ₹2,665.
Conversely, consumer and cement stocks faced selling pressure. Trent fell by 2.31% to ₹4,895, and Asian Paints decreased by 1.89% to ₹2,435.80. UltraTech Cement dropped 1.71% to ₹12,434, while Nestle India and Titan Company saw losses of 1.34% and 1.16%, trading at ₹1,172.40 and ₹3,417.50, respectively.
The Bank Nifty displayed resilience by remaining above the 55,200 level, though it continues to trade below its 5-day EMA, signaling short-term weakness. Ponmudi R, CEO of Enrich Money, noted this duality in performance.
Global factors also impacted market sentiment, particularly concerns surrounding US-India trade relations linked to Trump’s proposed $100,000 ‘one-time payment’ for H-1B visa fees, which weighed heavily on IT stocks. “Overall sentiment remains fragile as these proposals and related tariff threats dampen hopes for an India-US trade deal, causing anxiety in the Nifty IT index,” remarked Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
In contrast to equity markets, gold prices surged to record highs of $3,728 per ounce due to safe-haven demand. “Gold prices have hit new record highs, disregarding cautious comments from Federal Reserve officials regarding future interest rates,” stated Darshan Desai, CEO of Aspect Bullion & Refinery. He added that gold ETF holdings have been increasing at their fastest rate in three years, indicating significant market interest.
Domestic institutional investors provided some support on the same day, purchasing equities worth ₹2,582 crore, although this was not enough to counterbalance the selling pressure from foreign investors.
Technical indicators suggest that the market is currently in a consolidation phase, with momentum indicators cooling off. “The RSI (14) has eased nearly 10 points to 58 from last week’s high of 68.37, indicating a healthy consolidation away from overbought levels,” noted Hariprasad K.
Market participants are encouraged to exercise caution amid the current volatility. “Given the backdrop of increased volatility and mixed global cues, traders should adopt a ‘buy-on-dips’ strategy,” recommended Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking Private Limited.
For the day ahead, the Nifty is projected to trade within the range of 25,150 to 25,450, with immediate resistance at 25,300 to 25,350 and support at 25,100 to 25,150.
