Sensex and Nifty opened higher on September 5, rebounding from the previous session's decline. However, they soon turned flat amid mixed signals from global markets.
At 9.48 AM, the Sensex was up 31 points or 0.04 percent at 82,384 and the Nifty 50 was up 14 points at 25,212. About 2,229 shares advanced, 757 shares declined, and 117 shares remained unchanged. Telecom and IT stocks dragged Nifty 50 down while FMCG and banks provided support to the index.
Amid a lack of major domestic triggers, investors are focusing on upcoming US economic data to gauge the Federal Reserve's next move. "The market is confident about a rate cut in September, but the uncertainty lies in the quantum of the cut and this uncertainty is likely to keep investors cautious," said Kranthi Bathini, Director - Equity strategy at WealthMills Securities.
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Bathini also said that strong liquidity is what is driving the Indian market currently. "Any dips in the market are being absorbed by this liquidity, which is coming from both domestic and foreign portfolio investors."
UltraTech Cement, Shriram Finance, Tata Steel, ITC, and LTIMindtree were the top gainers on Nifty 50, rising 0.6-2 percent. Meanwhile, HDFC Life, Nestle, Britannia, BPCL, and HUL were the biggest losers on the index.
Zomato shares gained over 4 percent after JPMorgan raised its price target to Rs 340 from Rs 208. AU Small Finance Bank and Cholamandalam Investment rose 2 percent and 4 percent, respectively, after Goldman Sachs initiated a 'Buy' call on both.
On the technical side, Nifty 50 is likely to find support at 25,150 followed by 25,050 and 25,000, said Hardik Matalia, Derivative Analyst at Choice Broking. "On the higher side, 25,350 can be an immediate resistance, followed by 25,400 and 25,500," Matalia said.
Analysts seem to have a divided approach to valuations in the Indian market. Some believe that from a long-term perspective, valuations may not be a significant concern given India's high growth trajectory. Others advise investors to refrain from aggressive bets amidst the current elevated valuations.
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As per data released on September 4, the US job openings in July dropped to their lowest level since January 2021. This bolstered expectations of a higher magnitude rate cut during the Federal Open Market Committee (FOMC) meeting later this month.
Investors are now waiting for additional economic signals. The US services industry data and jobless claims data will be released later in the day. The highly anticipated nonfarm payrolls report, due on September 6, is expected to provide clearer insights into the health of the US economy and the magnitude of any forthcoming rate cut.
In the Asia-Pacific region, markets largely rebounded from the previous day's losses. Adding to the global economic developments, China's financial regulators have proposed a reduction in interest rates on up to $5.3 trillion worth of outstanding mortgages to ease pressure on consumers and the banking sector, as reported by Bloomberg. This move is expected to help millions of borrowers.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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