Indian markets open flat amid cautious sentiment, DII inflows support equities despite global pressures

NEW DELHI: Indian benchmark indices opened flat on Wednesday amid cautious domestic sentiment, even as strong domestic institutional inflows continued to support the markets against persistent foreign portfolio investor (FPI) outflows and global uncertainties. The BSE Sensex opened at 75,948.49, down 61.21 points, or 0.08 per cent, while the NSE Nifty 50 slipped 35.60 points, or 0.15 per cent, to 23,878.10.

Banking and market expert Ajay Bagga said domestic institutional investors (DIIs) and retail SIP inflows have played a major role in stabilising Indian equities despite global headwinds. “Despite heavy macro headwinds, developed-market equities — specifically in the US — remain resilient, though intraday volatility is rising. The only reason the Nifty 50 hasn’t suffered a full-scale meltdown below 23,500 is the massive counter-cyclical buying by Domestic Institutional Investors (DIIs) and robust retail SIP (Strategic Investment Plan) inflows, which continue to absorb the foreign selling,” Bagga said.

He also highlighted rising fiscal concerns, noting that the Centre has already forgone nearly Rs 14,000 crore in tax revenue after cutting central excise duty on petrol and diesel by Rs 10 per litre. “Despite retail fuel price hikes of ~Rs 7.50 per litre implemented across May, Oil Marketing Companies (OMCs) are still running under-recoveries and absorbing massive processing losses of roughly Rs 600 crore per day. This bleeding will sharply contract corporate advance tax payouts from the state-owned energy sector in Q1 and Q2,” he noted.

Bagga further warned of fiscal slippage due to lower fuel tax revenues, rising subsidies and weaker growth projections. “The combination of missing fuel tax revenues, soaring fertiliser/LPG subsidies, and down-revised economic growth is forcing a major rewrite of the Union Budget math. We are now forecasting a fiscal slippage of approximately Rs 1.1 trillion (Rs 1.1 lakh crore). This 30-basis-point overshoot is expected to push the actual fiscal deficit to 4.6 per cent to 4.7 per cent of GDP,” he added.

In the commodities market, crude oil and gold prices traded lower at the time of filing this report. Crude oil declined 1.73 per cent to $92.26, Brent Crude fell 1.55 per cent to $98.04, while gold slipped 0.14 per cent to $4,504.27 per ounce.

Among sectoral indices, Nifty Metal led the gains, rising 1.05 per cent to 13,634.40, followed by Nifty Media, up 0.64 per cent at 1,384.00. Other gainers included Nifty Pharma, Nifty FMCG, Nifty Healthcare, Nifty Consumer Durables, Nifty Auto, Nifty PSU Bank and Nifty IT.

On the downside, Nifty Oil & Gas declined the most, falling 0.68 per cent to 11,437.85. Nifty Financial Services 25/50, Nifty Private Bank and Nifty Realty also traded in the red.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, said key support levels for the market remain around the 23,850-23,875 range on the Nifty. “However, the short-term outlook remains positive. We believe the 20-day SMA (Simple Moving Average) at 23,875/75900 and 23,850/75800 would act as important support zones for day traders. As long as the market trades above these levels, the uptrend will remain intact. On the upside, 24,100/76600 could be an immediate resistance zone for bulls,” he said.

Chouhan added that a break below the 23,850 mark could trigger further downside towards the 23,700-23,600 range, making level-based trading crucial during the ongoing consolidation phase. (ANI)