2023 was the best return-generating year for Indian equities since 2020, given the return from equity indices remained far ahead of the inflation rate after 2022 exited with significant loss to equity investors. Indian stock market maintained its sideways range-bound journey through the mid-session on Friday, as the market indicators like the benchmark Nifty 50 and the benchmark BSE Sensex remained marginally moved. Investors seemed reluctant to place big bets, threading a makeshift needle of no clear driving global catalysts and with big economic data releases expected later in the day.
As of 1:00 PM IST, the Nifty 50 index was trading at 24,845.9, with a small gain of about 19.7 points or 0.08% over its previous close of 24,826.2. The index traded mostly sideways during a tight range for much of the morning and early afternoon, not able to build much of a directional bias.
The free-float BSE Sensex was at 81,678.5, up by around 126.9 points or 0.16%. The 30-share index – just like the Nifty – took a muted start and largely floundered in a narrow band.
Global Headwinds that Don’t Go Away:
Global markets only added to the mixed signals, perhaps leading to an exaggerated sense of caution in the domestic market’s trading picture. European markets opened higher, but only slightly, while the Asian markets finished their day showing a largely negative bias, dragged down by fears about slowing Asian economic growth. Not helping sentiment on the day was the overnight performance of US stocks, which saw most of their early gains trimmed severely.
Market participants around the world are closely anticipating the release of important economic data, especially the US Q1 GDP numbers, which promise to shed light on the state of the world’s largest economy. Any large unexpected miss might set off a bout of volatility in markets around the world, including India.
Sectoral Performance Still Uneven Across Sectors
Even as the sectoral landscape on the Indian bourses continued to reflect a lack of direction, the mid-session turnover kept increasing, as suggested by the massive 172,000 contracts traded in Nifty today. Though the Nifty Metal and Realty indices held on to their morning highs and were building positive momentum, the Nifty IT index continued to be under pressure. Even the Nifty Bank index traded in a very tight range, which was a testimony to the overall lack of conviction in the larger market. Interestingly, despite a sharp run-up recently, the Nifty Auto index saw some profit-taking here.
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Stock-specific action saw Sun Pharmaceutical Industries and Adani Ports & Special Economic Zone maintaining their position among the top gainers in the Nifty 50. Bajaj Auto and Wipro remained under consistent selling pressure and Tata Motors added to their list of major losers.
Analyst Expectations and Market Sentiment
Market analysts continue to maintain their stance that the Nifty is in a phase of consolidation for now with 24,700 as an important support in the near term. For one, the 24,900-25,000 area still serves as a big resistance wall. A break out of this chop would most certainly determine the next directional move for the index.
Market participants are closely tracking the release of India’s Q4 GDP data later this week, which is expected to offer more key clues on the domestic growth recovery trend. To be sure, any positive surprises would go a long way toward injecting some much-needed bullish sentiment into the market.
Indian stock market traded in a narrow range during the mid-session on Friday as the underlying cautious sentiment continued amid mixed global cues and ahead of major economic data releases. As such, investors will mostly stay on the sideline until we get some more obvious directional signals from both the U.S. and global landscape.
