FOREX
Markets open lower on global cues, inflation worries
Equity benchmarks opened in the red on Wednesday, extending losses for the fifth consecutive session, as concerns over domestic inflation and weak global cues weighed on investor sentiment.
The BSE Sensex fell 189.68 points or 0.24 per cent to 78,485.50, while the NSE Nifty declined 98 points or 0.41 per cent to 23,785.45 in early trade.
The market weakness comes after India’s retail inflation surged to a 14-month high of 6.2 per cent in October, breaching the Reserve Bank of India’s upper tolerance limit of 6 per cent.
“The Trump victory has added an element of high volatility to markets. From the emerging market perspective, the rise in the dollar index and the sharp spike in the US 10-year bond yield to 4.42 per cent are causes of concern. Such high yields in US bonds will facilitate more outflows from emerging markets to the US,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
IndusInd Bank led the gainers on NSE, rising 0.73 per cent, followed by Bharti Airtel (0.65 per cent), HDFC Bank (0.63 per cent), State Bank of India (0.51 per cent), and Titan Company (0.42 per cent).
On the flip side, Bharat Electronics Ltd fell the most, dropping 2.12 per cent, followed by Hero MotoCorp (-2.03 per cent), Mahindra & Mahindra (-2.02 per cent), Maruti Suzuki (-1.46 per cent), and Tata Steel (-1.40 per cent).
The auto sector faced significant selling pressure, with major manufacturers trading lower. The PSU Bank index also witnessed profit booking.
“Almost all major sectoral indices faced profit booking at higher levels, with the PSU Bank and Auto indices declining the most, each by around 2 percent,” noted Shrikant Chouhan, Head of Equity Research at Kotak Securities.
Foreign institutional investors (FIIs) continued their selling spree, offloading equities worth over ₹3,000 crore on November 12, while domestic institutional investors (DIIs) provided some support by purchasing equities worth ₹1,854 crore.
In the commodities market, gold prices hit a two-month low of $2,607 per ounce as the dollar strengthened following Trump’s election victory. Crude oil futures traded slightly higher, with Brent crude at $72.09 per barrel, up 0.28 per cent.
“Bears are dominating Dalal Street, with a pessimistic outlook driven by rising US bond yields amid inflation concerns following Donald Trump’s 2024 election win. Fears of Trump’s tariff plans, especially on China, are weighing on emerging markets like India,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
The market outlook remains cautious ahead of key US inflation data due later today. “The benchmark index opened with a gap up, sparking hopes for a sustained upward move. However, as the shorter-term moving averages acted as an overhead supply zone, the index succumbed to selling pressure within the opening minutes,” said Ameya Ranadive, Senior Technical Analyst at StoxBox.
On the macroeconomic front, India’s factory output, measured by the Index of Industrial Production (IIP), showed some improvement, growing 3.1 per cent year-on-year in September, compared to a contraction of 0.1 per cent in August, primarily driven by an uptick in manufacturing activity.
