Nifty in red, Sensex loses 330 pts in opening amid valuation concerns of Indian markets

MUMBAI: Indian stock markets opened flat on Monday as valuation concerns emerged alongside weak earnings in the first quarter of the current financial year. The Nifty 50 index opened at 25,123.65, declining by 26.20 points, or 0.10 per cent, while the BSE Sensex opened at 82,392.04, down by 108.43 points, or 0.13 per cent.

Experts attribute the cautious start to a mix of high valuations, weak corporate results, and global uncertainties. Ajay Bagga, banking and market expert, said, “Indian markets have a problem of premium valuations with earnings yet to pick up meaningfully and a weak global sentiment impacting FPI inflows”.

He added that large divestments by insiders, including promoters and private equity funds, as well as a strong pipeline of new primary market issuances, are draining liquidity from secondary markets. “When promoters are selling their crown jewels, markets should be more circumspect and lowering valuations”, Bagga said. “Instead, we are seeing a continued ‘buy all dips’ strategy by domestic retail investors, who are holding up the markets and providing easy exits to departing insiders in a counterintuitive move”.

Global sentiment remains uncertain, particularly in the United States. US markets witnessed a negative week amid increasing trade tensions under President Donald Trump’s administration, which included fresh tariff-related announcements. Tensions between the Trump administration and the Federal Reserve, led by Jerome Powell, further dampened sentiment.

This week, the US markets are awaiting major earnings announcements, especially from big banks, along with key inflation data, which could indicate the impact of Trump’s tariffs on consumer and producer prices.

Back in India, in the broader market indices on the NSE, the Nifty Midcap 50 and Nifty Smallcap 1000 opened in the green, while other major indices were in the red. The Nifty 100 index was down by 0.20 per cent. In sectoral indices, only Nifty Auto and PSU Bank were in positive territory, while the rest opened in red. Notably, Nifty IT was down by more than 1 per cent.

Akshay Chinchalkar, head of research at Axis Securities, pointed out that the Nifty dropped 205 points on Friday, marking its biggest single-day percentage fall in over a month. “Technically speaking, Friday’s candle had a long upper shadow and a close near the lows, and that’s weak behavior”, he said.

Several companies are expected to report their first-quarter results today. These include HCL Technologies, Authum Investment & Infrastructure, Tata Technologies, Ola Electric Mobility, Tejas Networks, Rallis India, Benares Hotels, Kesoram Industries, and Royal India Corporation.

“The area between 25,000 and 25,127 is now a critical support. Bulls must defend this and push the index above 25,340 to reverse the ongoing dip. The market has closed below a short-term rising channel, so if it slips below 25,100, we may see a test of the 24,900-25,000 zone where another support channel lies”, Chinchalkar said.

Sunil Gurjar, SEBI-registered analyst and founder of Alphamojo Financial Services, echoed similar concerns. He said, “The markets are currently experiencing a significant sell-off, driven primarily by three factors: weak Q1 earnings expectations, pressure on tech stocks, and broader valuation concerns”. He added that Nifty’s key reversal level is now 24,650. If the index falls below 25,300 and does not find support at 24,650, it could sharply decline to 23,855.

In other Asian markets, Japan’s Nikkei 225 and Taiwan’s weighted index were down by 0.25 per cent and 0.74 per cent, respectively. However, most other indices opened higher, with Singapore’s Straits Times gaining 0.26 per cent and South Korea’s KOSPI rising by 0.23 per cent. (ANI)