Sensex, Nifty open flat amid weakness in auto, IT, metal stocks

The underlying trend of Nifty continues to be negative, and more weakness could be in store for the short term.

Benchmark indices Nifty and Sensex opened subdued on Friday, August 29, slipping into a third straight day of losses and setting up a weak close for the week. Decline in IT, auto and metal stocks dragged the markets lower, while broader markets bore the brunt as mid and smallcap indices saw sharper declines.

At about 9:30 am, the Sensex was down 7.67 points or 0.01 percent at 80,072.90, and the Nifty was down 1.90 points or 0.01 percent at 24,499.00. About 1517 shares advanced, 1373 shares declined, and 132 shares were unchanged.

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One striking aspect of yesterday’s trade was that despite heavy domestic buying of Rs 6,920 crore, which far outpaced FII selling of Rs 3,856 crore, the Nifty still fell 211 points. The drag came from a build-up of short positions by FIIs, driven by concerns over the 50 percent Trump tariff and stretched valuations in India, V K Vijayakumar of Geojit Investments said.

Back home, policy measures like fiscal support through the Budget, monetary easing via rate cuts, and the expected GST rationalisation are likely to bolster growth and corporate earnings in the coming quarters. A sustainable rally will then have stronger fundamentals behind it. In the meantime, investors may look to accumulate fairly valued stocks on market declines and stay patient for the upturn, experts say.

Among movers, Navneet Education gaiend up to 2 percent after CNBC TV-18 reported that the Group of Ministers on rate rationalisation may table proposals for a major GST revamp. According to sources, the GST Council could consider revising rates on items such as erasers, maps, atlases, sharpeners, pencils, crayons, exercise books, mathematical sets, geometry boxes and colour boxes. The report added that the proposals include cutting GST on erasers and exercise books to nil, and reducing rates on items like pencils, crayons, sharpeners, maps and geometry boxes from 12 percent to either nil or 5 percent.

Bharat Forge shares were down over a percent after Morgan Stanley said that exports to the US made up 38 percent of its standalone revenue in FY25, with about 30 percent of the topline exposed to the recent hike in tariffs from 10 percent to 50 percent. While the company managed to pass on part of the impact in the June quarter when the lower tariffs were in place, the sharper levy could now dent its EBITDA by nearly 30 percent.

Technical View

"Technically, this market action indicates a down trend continuation pattern. The crucial support of the previous opening upside gap of 18th Aug has been broken decisively on the downside at 24670, and Nifty closed below it. Another support of the ascending trend line connecting April to Aug 25's bottom has also been broken on the downside. This is not a good sign," says Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities. "The underlying trend of Nifty continues to be negative, and more weakness could be in store for the short term. The next lower supports to be watched are around 24,300-24,250 (previous swing lows and 200-day EMA). Any pullback could find strong resistance around 24,700 levels," he added.

HUL, Asian Paints, Trent, Kotak Mahindra Bank, Tata Consumer Products, and Shriram Finance were the top gainers on the Nifty. Laggards on the index included Tata Motors, NTPC, ONGC, Hero MotoCorp, and Titan Company.

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