Indian benchmark equity indices, the Nifty 50 and BSE Sensex, opened almost unchanged on Thursday, tracking weak global cues as investors continued to assess the US Federal Reserve’s new policy stance and kept a wary eye on rising geopolitical tensions in the Middle East. Despite strong domestic fundamentals, external headwinds are still keeping short-term market direction under wraps.
At the opening bell, the Nifty 50 was down just over a dozen points in trading at 24,803.25, marginally lower from its close of 24,812.05 yesterday. The BSE Sensex opened in the negative, at 81,410.63, lower than its Wednesday close of 81,444.66. This muted start follows a nervous end to Wednesday’s trading session for both indices, with the Nifty finishing 41 points down and the Sensex losing 138 points. Throughout the morning, both indices were slightly up and down around their initial values, showing no clear direction either way.
Global Cues and Geopolitical Headwinds
Today’s tepid opening to the session on Dalal Street can be mostly blamed on a mix of global headwinds. As widely expected, the US Federal Reserve maintained its target federal funds interest rates of 4.25%-4.50% in its most recent monetary policy meeting. The decision itself was consistent with market consensus, Fed Chair Jerome Powell’s press commentary, and the updated “dot plot” both pointed towards a less dovish future, essentially, more of a wait-and-see approach, projecting only 50 bps of cuts as far out as 2025, and downgrading the 2026 outlook. This somewhat hawkish language, along with Powell’s comments that announced tariffs could push inflation higher, made for a choppy tone in global markets.
Geopolitical tensions in the Middle East have been a major overhang. Expectations of continuing unrest within Iran as well as military actions or threats of actions between Iran and Israel have increased worldwide risk aversion. Although crude oil prices are down slightly on the day (Brent Crude at $76.48 and WTI Crude at $75.11), their volatility due to the outbreak of war has been hugely negative for large oil importers such as India, due to fears of inflationary pressures and growing current account deficits. Asian markets were sharply lower in early trade with Japan’s Nikkei 225 down 3% and Hong Kong’s Hang Seng index futures pointing to a similarly weak opening, setting a negative tone for Indian equities.
Domestic Activity & Sectoral Snapshot
Amidst all the global cross currents, DIIs have stood by and consistently supported the Indians standing their ground. On June 18, DIIs were net buyers, pumping in ₹1,091.34 crore into equities. Foreign Institutional Investors (FIIs) stayed bullish but logged a net buy of ₹890.93 crore on June 18 after a spate of net sell days. The Indian Rupee resumed its trend of depreciation, 14 paise lower to trade at 86.57 per US dollar in early trade on safe-haven demand for the greenback and continued risk-off sentiment.
From a sectoral perspective, the market was a bit of an odd picture. Among sector indices, the Nifty Auto index and Nifty Private Bank index kept the early trade fairly strong with few pockets of strength, managing to stay positive. Yet, sectors such as Nifty Media, IT, and Metal were the worst hit, reiterating profit booking and negative investor sentiment. Large-cap stability was a strong theme in the broader market, with the Nifty Mid-cap and Small-cap indices resuming their down-trend for the second day running.
AppLovin Corp.
IndusInd Bank – a recent high-profile downgrader – was one of the biggest gainers, continuing its surge after a recent positive rating upgrade.M&M and Maruti Suzuki also showed resilience and traded higher. Kotak Mahindra Bank, NTPC, and Power Grid were among early trade’s biggest drags. Siemens Energy India, which made its market debut today after its demerger, saw its shares listed on the exchanges.
Also check:- Indian Markets Tread Cautiously Amid Geopolitical Jitters and Fed Watch
According to market watchers, the Nifty 50 could be seen consolidating in the 24,500-25,000 band in the near term, with a definitive breakout largely dependent on major developments in geopolitical concerns or more clarity in messaging from global central banks. Recognizing that soft landing prospects are still in distance, investors should stay alert and continue to page the developing global data and geo-political situation closely.
