Mumbai (Maharashtra) [India], November 13 (ANI): Indian equity markets opened lower on Friday as rising inflation and concerns over a higher interest rate environment weighed on investor sentiment, putting pressure on the recent rally in domestic benchmarks.
The NSE Nifty 50 index opened at 25,209.85, declining 89.50 points or 0.35 per cent, while the BSE Sensex opened at 81,833.78, down 77.23 points or 0.09 per cent. Both indices declined further after opening.
The weakness comes after a strong rally in November, with investors assessing whether the recent gains can continue amid rising inflation in India and the United States.
V K Vijayakumar, Chief Investment Strategist, Geojit Investments, said, “After the spectacular rally of 9.7% in Nifty so far in November, the important question in the minds of investors is: can the rally sustain? The most important trigger for the swift rally was the aggressive comeback of the FIIs, assisted by the weakening of the AI trade and improving earnings growth in India. Indications are that the FII buying will continue, taking the monthly inflows easily to above Rs 1 lakh crore, which will be a record high. With this kind of aggressive FII buying, the bears will be on the back foot.”
He further added, “Rising inflation in the US and India means a rising interest rate scenario which can turn out to be adverse for equity markets. In the US, two rate hikes are likely in December and January. With the October CPI inflation in India rising to 6.09 %, the RBI will have to raise rates at least by 25 bp each in December and February. These concerns, along with the ongoing DII profit booking, can apply brakes on the rally in the near term.”
In the broader market, all major indices opened in the red. The Nifty 100 was down by 0.34 per cent, while the Nifty Midcap 100 declined 0.31 per cent. The Nifty Smallcap 100 also lost 0.17 per cent in the early trading session.
Sectoral indices on the NSE also witnessed broad-based weakness. The Nifty Auto declined 0.38 per cent, while the Nifty FMCG lost 0.06 per cent. The Nifty Metal was down by 0.56 per cent, and the Nifty PSU Bank declined 0.13 per cent. The Nifty Private Bank fell 0.41 per cent, while the Nifty Realty was down 0.05 per cent. The Nifty IT also lost 0.25 per cent.
Meanwhile, Brent crude oil prices surged compared to Thursday and were trading at USD 95.39 per barrel at the time of reporting.
Gold prices were up marginally to Rs 1,37,308 per 10 grams for 24 karats, while silver also gained to Rs 1,79,773/kg.
Anindya Banerjee, Head of Commodity and Currency Research, Kotak NEO, said, “The most interesting development this morning is the resilience in gold and silver despite an unfavourable global backdrop. The dollar index is near 103.2, US ten-year yields have risen to around 5.10%, and oil has rebounded sharply. Yet both precious metals are recovering in Asian trade. One morning does not establish a bottom, but when prices begin to withstand factors that had been driving them lower, we need to pay attention”.
In other Asian markets, almost all major indices were trading in the green, except Hong Kong's Hang Seng index, which was down 0.90 per cent at 23,792.
Japan's Nikkei 225 index was trading at 61,390, up 0.94 per cent, while Singapore's Straits Times gained 0.29 per cent to 5,250. Taiwan's weighted index jumped 1.80 per cent to 43,955, while South Korea's KOSPI index was flat at 5,334. (ANI)
Sensex down 180 points, Nifty loses 0.7% in opening session as rising CPI turns investors cautious
