Domestic equity benchmarks Sensex and Nifty opened on a flat note on Tuesday, as investors stayed cautious ahead of the US Federal Reserve’s policy outcome at its September 16-17 meeting.
Market participants are also tracking developments in the US trade negotiations with China and India.
At 9:18 am, the BSE Sensex was up 95.45 points, or 0.12 per cent, at 81,881.19 after rising as much as 180 points in early trade. The NSE Nifty50 added 9.35 points, or 0.04 per cent, to 25,078.55, after touching an intraday high of 25,111.25.
Among Sensex stocks, Mahindra & Mahindra (M&M) led gainers, rising 1.44 per cent to Rs 3580. Bajaj Finserv shares were up 0.69 per cent. Other gainers included Adani Ports (up 0.69 per cent), Kotak Mahindra Bank (up 0.61 per cent) and UltraTech Cement (up 0.55 per cent).
In overnight trade, the S&P 500 gained 0.47 per cent to close at 6,615.28, while the Nasdaq rose 0.94 per cent to 22,348.75. The Dow Jones Industrial Average edged up 0.11 per cent to finish at 45,883.45.
Earlier on Tuesday, Asian markets traded mixed, with Japan’s Nikkei 225 advancing 0.30 per cent to 44,904.13 and South Korea’s KOSPI climbing 1.29 per cent to 3,451.16. Hong Kong’s Hang Seng Index also added 0.29 per cent to 26,370.83.
On Monday, the Sensex was down 118.96 points, or 0.15 per cent, to 81,785.74, while the Nifty50 declined 44.80 points, or 0.18 per cent, to close at 25,069.20.
VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said the Indian market’s underperformance over the past year was largely driven by weak earnings growth and elevated valuations.
“A sustained rally is possible only when these fundamental factors change. It is also a fact that Trump tariffs have impacted the sentiment. These fundamental factors are now set to change. The bold reforms – both fiscal and monetary-that have been implemented this year have started yielding results and this trend is likely to gather momentum, going forward. The market will soon start discounting the positive developments,” Vijayakumar said.
“An India-US trade agreement without the penal tariffs, if that happens, can be a shot in the arm for markets. India will continue to attract premium valuations due to its superior long-term growth and earnings potential. But in the short run valuations matter. Retail investors chasing highly valued smallcaps are taking unnecessary risks. This price-agnostic behaviour is irrational and is unlikely to fetch decent returns in the long run,” Vijayakumar added.