Share markets open cautiously in red, global weakness weighs on sentiments

MUMBAI: The domestic equity benchmarks opened on a cautious note and slipped into the red on Friday as investors remained on the sidelines ahead of the outcome of the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting, amid weak global cues.

At the opening bell, the Nifty 50 index declined by 37 points, or 0.14 per cent, to 25,605.80, while the BSE Sensex opened lower by 64.61 points, or 0.08 per cent, at 83,249.32. Market participants remained cautious ahead of the RBI announcing the MPC decision.

Ajay Bagga, banking and market expert, said, “Expect weak Indian markets on the back of weak global cues, though over time, funds escaping the AI carnage could seek uncorrelated markets like India, which have not benefited from the AI trade. The Base Year for GDP and Inflation are changing this month with the new series of data being issued next week. In view of that, the RBI will hold its GDP and Inflation forecast steady for now. On global developments, it will express optimism due to the India-EU and India-US proposed trade deals. Policy stance to remain neutral”.

Investor sentiment remained weak due to continued selling in global technology stocks. The ongoing Big Tech sell-off and concerns over heavy AI-related spending have unsettled global markets.

Following negative cues from US markets overnight, Asian markets also opened weak, with South Korea’s Kospi index falling sharply by 5 per cent. The AI trade is facing renewed pressure as large AI spending announcements are being met with sceptical selling by investors.

Meanwhile, IT services companies are facing challenges from new AI-based coding offerings from players such as Anthropic, which could impact software firms’ output and margins.

In the broader market on the National Stock Exchange, the Nifty 100 index was down by 0.10 per cent. The Nifty Smallcap index witnessed heavier losses, declining by 0.9 per cent, while the Nifty Midcap index slipped by 0.34 per cent.

Among sectoral indices on the NSE, FMCG, Private Bank and Realty stocks opened in the green with marginal gains. However, most other sectors were under pressure. The Nifty IT index saw the highest decline, falling by more than 1 per cent. Media stocks also traded lower, while the Nifty Pharma index declined by 0.8 per cent.

In the commodities market, gold prices continued their downward trend on Friday, slipping by around 1 per cent to Rs 150,890 per 10 grams for 24-carat gold. Silver prices saw sharper losses, falling by 3.4 per cent to Rs 235,485 per kilogram.

Overall, markets remained subdued as investors awaited clarity from the RBI MPC outcome and tracked weak global developments. (ANI)