Mumbai: Indian equity benchmarks opened higher on Thursday, defying weak global cues amid selling pressure in technology stocks across US and Asian markets.
The BSE Sensex opened at 72,965.80, gaining 183.91 points, or 0.25 per cent, while the NSE Nifty started the session at 22,671.30, up 48.60 points, or 0.21 per cent.
IT, FMCG and Auto Stocks Lead Early Gains
Sectoral performance was mixed in early trade. The Nifty IT, Nifty FMCG, Nifty Auto and Nifty Private Bank indices were among the top gainers, rising by up to nearly 2 per cent.
On the other hand, the Nifty Metal index was the biggest laggard, declining by 1 per cent. The PSU Bank, Consumer Durables, Pharmaceuticals and Healthcare indices were also trading lower.
US Inflation Fuels Federal Reserve Rate Hike Concerns
Market experts said hotter-than-expected US inflation had increased concerns about another interest rate hike by the US Federal Reserve in October. US inflation rose to 3.7 per cent in September from 3.4 per cent in August, they noted.
The concerns triggered heavy selling in US markets, with the technology-heavy Nasdaq Composite falling 1.88 per cent.
The weakness also spread to Asian markets, with Japan’s Nikkei 225 declining by more than 4 per cent and South Korea’s Kospi falling by over 7 per cent.
From the Indian market’s perspective, experts said the correction in artificial intelligence (AI) stocks could be positive, as foreign institutional investors (FIIs), who have been selling Indian equities while investing in AI stocks, could reduce or halt that trend.
Nifty Technical Indicators Point to Some Recovery in Momentum
According to analysts, the Nifty formed a bearish-leaning candle. Its Relative Strength Index (RSI) stood at 41.66, above its average of 32.01, indicating some recovery in momentum.
On Wednesday, foreign institutional investors remained net sellers, offloading Indian equities worth approximately Rs 1,857 crore. Domestic institutional investors (DIIs), meanwhile, supported the market with net purchases of around Rs 2,670 crore.
Global Markets and Crude Oil Prices
Wall Street ended lower on Wednesday as US inflation intensified concerns about a possible interest rate hike, weighing on the Nasdaq and AI-related stocks. Asian markets were also trading in the red on Thursday.
Meanwhile, crude oil prices declined by nearly 2 per cent as investors assessed risks to supplies through the Strait of Hormuz alongside US measures aimed at easing shipping costs.