Nifty under 25,900, Sensex swings between gains and losses amid caution

Nifty 50, Sensex opened on a flat note on October 31.

Benchmark equity indices Nifty 50 and Sensex opened on a soft note on October 31, as investor sentiment remained cautious as renewed foreign investor selling and profit booking near highs weighed. However, after the open, the indices saw volatile trade, shifting between the red and green.

At 09:35 am, the Sensex was up 272.71 points or 0.32 percent at 84,677.17, and the Nifty was up 70.20 points or 0.27 percent at 25,948.05. About 1878 shares advanced, 975 shares declined, and 178 shares unchanged.

Sectoral performance was largely positive in early trade, led by strong gains in Nifty PSU Bank (up 1.34 percent), Realty (up 0.94 percent), Auto (up 0.81 percent), and FMCG (up 0.58 percent). Nifty Consumer Durables and Oil & Gas indices also advanced around half a percent each, while Financial Services, IT, and Private Bank indices saw modest gains.

However, selling pressure lingered in Healthcare (down 0.28 percent), Metal (down 0.37 percent), and Media (down 0.20 percent), capping broader market momentum.

The Trump-Xi summit delivered only a one-year truce in the US-China trade war, not a breakthrough trade deal. To that extent market participants were disappointed at the outcome even though there is relief in the declining trade tensions and possible movement towards further progress.

Wall Street saw losses overnight, driven by renewed concerns about global growth and policy uncertainty. Market participants are treading carefully while digesting the Federal Reserve’s latest policy cues and awaiting key economic data for further direction on the global outlook.

Asian equities climbed close to their record and US equity-index futures advanced as strong earnings from Amazon.com Inc. and Apple Inc. lifted sentiment after a brief pause in the global stock rally.

On the domestic front, the rally in the Indian market has been running out of steam when it approaches the record high of 26,277 set in September 2024. Renewed selling by FIIs is likely to be a drag on the market in the near-term.

"The increasing short positions being created by FIIs indicate that they view Indian valuations as relatively higher particularly seen in the light of earnings growth. This view will change only when leading indicators suggest a sustained recovery in earnings," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

In the previous session, after opening on a negative note, the market continued to slide down in the early to mid-part of the session. "Technically, this market action indicates presence of crucial resistance around 26100 and profit booking from the highs. Nifty is presently moving within a broader high low range of 26100-25800 levels and is now sliding down to the lower range," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.

The near-term trend of Nifty remains positive and the short term is in profit booking mode. There is a possibility of Nifty finding support around 25800-25700 levels in the next couple of sessions before bouncing back again from the lows.

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