Benchmark stock market indices opened lower on Wednesday after having incurred heavy losses in the past two trading sessions as cautious sentiment prevailed among investors.
The S&P BSE Sensex was down 15.56 points to 80,668.89, while the NSE Nifty50 lost 4 points to 24,332.00 as of 9:55 AM.
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said that the near-term market construct has turned weak with FIIs turning sellers on rallies.
“The trend of FII buying in early December has proved to be, as feared, a flash in the pan. Yesterday’s massive FII sell figure of Rs 6410 crores in the cash market indicates that more selling is in store on market bounces.
The underlying reason for the FII selling in India is the outperformance of US and the underperformance of India. While the S&P 500 is up 27.5% YTD, Nifty is up only 12% YTD. The fear is that this huge variation in relative performances may continue, given the strength of the US economy and the weakness in the Indian economy. The situation will change if leading indicators in India suggest recovery in GDP growth and corporate earnings in Q3,” he added.
Global markets are closely watching the Federal Reserve’s decision, which is anticipated later today. The market has already factored in a 25 basis point rate cut, making the central point of interest the Fed’s commentary accompanying the decision.
Meanwhile, in the Indian market, a notable trend is emerging where the broader market is showing strong performance. Companies delivering positive results are being rewarded by investors, and foreign institutional investor (FII) selling does not appear to be a significant concern at the moment.
Most sectoral indices opened in red.